UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-10345
---------------------
Nuveen Dividend Advantage Municipal Fund 3
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Jessica R. Droeger
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: October 31
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Date of reporting period: October 31, 2006
------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
------------------------------
ANNUAL REPORT October 31, 2006
------------------------------
Nuveen Investments
Municipal Closed-End Funds
NUVEEN PERFORMANCE
PLUS MUNICIPAL
FUND, INC.
NPP
NUVEEN MUNICIPAL
ADVANTAGE FUND, INC.
NMA
NUVEEN MUNICIPAL
MARKET OPPORTUNITY
FUND, INC.
NMO
NUVEEN DIVIDEND
ADVANTAGE
MUNICIPAL FUND
NAD
NUVEEN DIVIDEND
ADVANTAGE
MUNICIPAL FUND 2
NXZ
NUVEEN DIVIDEND
ADVANTAGE
MUNICIPAL FUND 3
NZF
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DEPENDABLE,
TAX-FREE INCOME BECAUSE
IT'S NOT WHAT YOU EARN,
IT'S WHAT YOU KEEP.(R)
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NUVEEN
INVESTMENTS
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NUVEEN
INVESTMENTS
Chairman's
LETTER TO SHAREHOLDERS
Photo of Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Once again, I am pleased to report that over the twelve-month period
covered by this report your Fund continued to provide you with attractive
monthly tax-free income. For more details about the management strategy
and performance of your Fund, please read the Portfolio Managers'
Comments, the Dividend and Share Price Information, and the Performance
Overview sections of this report.
For some time, I've used these letters to remind you that municipal bonds
can be an important building block in a well balanced investment
portfolio. In addition to providing attractive tax-free monthly income, a
municipal bond investment like your Fund may help you achieve and benefit
from greater portfolio diversification. Portfolio diversification is a
recognized way to try to reduce some of the risk that comes with
investing. For more information about this important investment strategy,
I encourage you to contact your personal financial advisor.
"IN ADDITION TO PROVIDING ATTRACTIVE TAX-FREE MONTHLY INCOME, A MUNICIPAL BOND
INVESTMENT LIKE YOUR FUND MAY HELP YOU ACHIEVE AND BENEFIT FROM GREATER
PORTFOLIO DIVERSIFICATION."
We also are pleased to be able to offer you a choice concerning how you
receive your shareholder reports and other Fund information. As an
alternative to mailed copies, you can sign up to receive future Fund
reports and other Fund information by e-mail and the Internet. The inside
front cover of this report contains information on how you can sign up.
We are grateful that you have chosen us as a partner as you pursue your
financial goals, and we look forward to continuing to earn your trust in
the months and years ahead. At Nuveen Investments, our mission continues
to be to assist you and your financial advisor by offering investment
services and products that can help you to secure your financial
objectives.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
CHAIRMAN OF THE BOARD
December 15, 2006
Nuveen Investments Municipal Closed-End Funds
NPP, NMA, NMO, NAD, NXZ, NZF
Portfolio Managers'
COMMENTS
PORTFOLIO MANAGERS TOM SPALDING AND PAUL BRENNAN DISCUSS U.S. ECONOMIC AND
MUNICIPAL MARKET CONDITIONS, KEY INVESTMENT STRATEGIES, AND THE ANNUAL
PERFORMANCE OF THESE SIX NATIONAL FUNDS. A 30-YEAR VETERAN OF NUVEEN, TOM HAS
MANAGED NXZ SINCE ITS INCEPTION IN 2001 AND NPP, NMA, NMO, AND NAD SINCE 2003.
WITH 17 YEARS OF INVESTMENT EXPERIENCE, INCLUDING 15 YEARS AT NUVEEN, PAUL
ASSUMED PORTFOLIO MANAGEMENT RESPONSIBILITY FOR NZF IN JULY 2006.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE ANNUAL
REPORTING PERIOD ENDED OCTOBER 31, 2006?
In response to market concerns about oil prices, inflation, and the actions of
the Federal Reserve over the past 12 months, bond yields exhibited some
volatility during this reporting period, with longer-term rates hitting a peak
in June 2006 before falling sharply for the remainder of the period. For the
period as a whole, interest rates at the shorter end of the taxable yield curve
generally continued to rise, while longer rates ended the period close to where
they began it or even declined. As short-term rates approached and exceeded the
levels of long-term rates, the taxable yield curve became increasingly flat and
subsequently inverted. Consequently, bonds with longer durations 1 generally
outperformed those with shorter durations during this period.
Between November 1, 2005 and October 31, 2006, the Federal Reserve announced six
increases of 0.25% each in the fed funds rate before pausing to leave monetary
policy unchanged at the August-October 2006 sessions of its Open Market
Committee. The increases raised the short-term target by 150 basis points, from
3.75% to 5.25%, its highest level since March 2001. During this same period, the
yield on the benchmark 10-year U.S. Treasury note rose just four basis points to
end October 2006 at 4.60%. In contrast, in the municipal market, the yield on
the Bond Buyer 25 Revenue Bond Index, a widely followed measure of longer-term
municipal market rates, fell to 4.78% at the end of October 2006, a decline of
43 basis points from the end of October 2005.
Economic growth over the past year reflected the fluctuations in interest rates,
energy prices, and the effects of a softening housing market. After expanding at
a rate of 1.8% in the fourth quarter of 2005, the U.S. gross domestic product
(GDP) rebounded sharply with a 5.6% gain in the first quarter of 2006 before
moderating to a pace of 2.6% in the second quarter of 2006 (all GDP numbers
annualized). In the third quarter of 2006, the rate of GDP growth slowed to
2.2%, largely as the result of an 18% slump in residential investment, the
largest decrease in 15 years. Despite the recent slowdown in economic
1 Duration is a measure of a bond's price sensitivity as interest rates
change, with longer duration bonds displaying more sensitivity to these
changes than bonds with shorter durations.
4
growth, the markets continued to keep a close eye on inflation trends. While
declining energy prices contributed to a benign 1.3% year-over-year increase in
the Consumer Price Index as of October 2006, the core rate (which excludes food
and energy prices) rose 2.7% for the same period. In general, the jobs picture
remained positive, with national unemployment at 4.4% in October 2006, down from
4.9% in October 2005, the lowest level since May 2001.
Over the 12 months ended October 2006, municipal bond issuance nationwide
totaled $367.1 billion, down 8% from the previous 12 months. This total
reflected the general decrease in the supply of municipal paper during 2006.
After reaching record levels in calendar year 2005, municipal supply declined
during the first 10 months of 2006, with $295.1 billion in new securities coming
to market, off 12.5% from the same period in 2005. A major factor in 2006's drop
was the sharp reduction in refunding volume, which fell almost 50% from last
year's levels. Overall, demand for municipal bonds, especially those offering
higher yields, continued to be strong and broad-based, with retail investors,
institutional investors such as hedge funds and arbitragers, and foreign
participants all taking part in the market.
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS REPORTING
PERIOD?
As the yield curve flattened over this 12-month period, we continued to
emphasize careful management of the Funds' underlying portfolios in line with
our established targets. This included pursuing a disciplined approach to
duration management and yield curve positioning throughout the period. As part
of this approach, we focused on purchasing bonds that we believed provided
attractive total return opportunities without excessive risk, emphasizing
attractively priced bonds with defensive coupons in the 20- to 30-year part of
the yield curve in NPP, NMA, NMO, NAD, and NXZ and in the 15- to 20-year range
in NZF. For all of these Funds, our purchases of defensive coupon bonds included
bonds with premium coupons 2.
We also broadened the scope of our investment performance management strategies
to place additional emphasis on income strategies. As part of exploring further
ways to increase the Funds' income-generating potential, we employed additional
tools that helped us measure and manage interest rate risk. We also focused on
purchasing bonds that offered the potential for more income in a variety of
ways, such as different types of
2 Premium coupon bonds are credits that, at the time of purchase, are
trading above their par values because their coupons are higher than
current coupon levels. Historically, these bonds have held their value
better than current coupon bonds when interest rates rise.
5
coupons. Among the bonds we added during this period were zero coupon bonds,
discount coupon bonds, and inverse floaters, all of which also added duration to
our portfolios at the time of purchase. (Inverse floaters are bonds with coupons
structured to move in the opposite direction of interest rates. For example, if
market interest rates decline, the interest rate earned by the inverse floater
will rise. An inverse floater increases the market rate risk and modified
duration of the investment.)
Since late 2004, we have also been using hedging strategies, including interest
rate swap agreements and futures contracts, in funds where we believed this
would help support our overall investment performance strategies, especially our
income strategies and our duration (interest rate risk) objectives. As discussed
in previous shareholder reports, the goal of these hedging strategies is to
manage the funds' durations (and price sensitivity) within a preferred range
without having a negative impact on their income streams or common share
dividends over the short term. In line with this objective, we deployed these
strategies in NZF later in the reporting period.
Although issuance nationwide declined during this period, the reduction in
issuance did not have a major impact on the implementation of this or other
strategies we had planned for these Funds. Much of the new supply was highly
rated and/or insured, and many of our new purchases were higher-rated credits.
In NPP, NMA, NMO, NAD, and NXZ, we added some uninsured health care names,
primarily dominant providers with strong management and operating histories, as
well as a few selected tobacco credits. In NZF, most of our purchase activity
focused on the essential services sectors.
In addition, we continued to keep the Funds well diversified geographically,
looking to states with stronger issuance, including California, Texas, New York,
and Florida, to find more attractive offerings as municipal issuance declined.
NZF also purchased paper issued in specialty states, such as California, New
York, and Ohio, which have relatively higher income tax levels. Municipal bonds
issued in these specialty states are generally in great demand by in-state
individual investors, which helps to support their value. These bonds also
provide additional liquidity, making it easier for us to execute trades as part
of implementing our strategies.
We also continued to emphasize maintaining the Funds' weightings of
lower-quality bonds. However, as credit spreads continued to narrow over this
period and municipal
6
issuance tightened, we generally found fewer attractively structured lower-rated
credit opportunities in the market. This was especially true during the second
half of this reporting period. Overall, the Funds continued to have good
exposure to the lower-rated credit categories.
In NPP, NMA, NMO, NAD, and NXZ, most of the cash we redeployed during this
period came from called bond holdings, although we also trimmed some of our
exposure to pre-refunded bonds to generate cash for new purchases. In NZF, we
sold holdings with shorter durations, including pre-refunded bonds, as well as
bonds with less attractive call features and credits producing lower tax-exempt
income streams as part of our yield curve and income strategies.
HOW DID THE FUNDS PERFORM?
Individual results for these Funds, as well as relevant index and peer group
information, are presented in the accompanying table.
TOTAL RETURNS ON NET ASSET VALUE*
For periods ended 10/31/06
1-YEAR 5-YEAR 10-YEAR
--------------------------------------------------------------------------------
NPP 7.50% 6.51% 6.75%
--------------------------------------------------------------------------------
NMA 7.16% 7.03% 6.95%
--------------------------------------------------------------------------------
NMO 7.49% 6.46% 6.28%
--------------------------------------------------------------------------------
NAD 7.59% 7.50% NA
--------------------------------------------------------------------------------
NXZ 7.86% 8.02% NA
--------------------------------------------------------------------------------
NZF 7.57% 7.95% NA
--------------------------------------------------------------------------------
Lehman Brothers
Municipal
Bond Index 3 5.75% 5.05% 5.85%
--------------------------------------------------------------------------------
Lipper General
Leveraged
Municipal Debt
Funds Average 4 8.42% 7.00% 6.63%
--------------------------------------------------------------------------------
* Annualized.
Past performance is not predictive of future results. Current performance may be
higher or lower than the data shown. Returns do not reflect the deduction of
taxes that shareholders may have to pay on Fund distributions or upon the sale
of Fund shares.
For additional information, see the individual Performance Overview for your
Fund in this report.
For the 12 months ended October 31, 2006, the total returns on net asset value
(NAV) for all six of the Funds in this report exceeded the return on the Lehman
Brothers Municipal
3 The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged
national index comprising a broad range of investment-grade municipal
bonds. Results for the Lehman index do not reflect any expenses.
4 The Lipper General Leveraged Municipal Debt Funds category average is
calculated using the returns of all closed-end funds in this category for
each period as follows: 1 year, 56; 5 years, 45; and 10 years, 39. Fund
and Lipper returns assume reinvestment of dividends.
7
Bond Index. The six Funds underperformed the average return for their Lipper
peer group for this period.
Factors that influenced the Funds' returns during this period included yield
curve positioning and duration management, the addition of bonds purchased as
part of our duration and income strategies, allocations to lower-rated credits,
the use of financial leverage, and advance refunding activity. 5
As longer rates declined and the yield curve flattened over the course of this
period, yield curve and duration positioning played an important role in the
performance of these Funds. Overall, bonds in the Lehman Brothers Municipal Bond
Index with maturities between one and four years were the most adversely
impacted by changes in the interest rate environment over this period, as rates
in that part of the curve rose. As a result, these bonds generally
underperformed longer bonds, with issues having maturities between 17 and 22
years and those with maturities 22 years and longer achieving the best returns
for the period. Yield curve positioning, or exposure to those parts of the yield
curve that performed best during this period, helped the Funds' performances. In
particular, NMA was not as well positioned as the other Funds in this report,
with relatively less exposure to the longer part of the curve and more exposure
to the shorter end, which hindered its performance. We continued to work to
strengthen the yield curve positioning of all of these Funds.
As previously mentioned, in recent months we added zero coupon bonds, discount
coupon bonds, and inverse floaters to our portfolios, all of which had a
positive impact on the Funds' performances for this period. Zero coupon bonds,
for example, typically have very long durations, all else equal, and tend to be
very sensitive to changes in interest rates. With rates at the long end of the
curve declining throughout much of this 12-month period, zero coupon bonds in
the Lehman Brothers Municipal Bond Index performed very well, exceeding the
return for the general municipal market by almost 500 basis points.
With bonds rated BBB or lower and non-rated bonds generally outperforming other
credit quality sectors during this period, these Funds also benefited from their
allocations of lower-quality credits. The performance of this sector was largely
the result of investor demand for the higher yields typically associated with
lower-quality bonds, which drove up their value and caused credit spreads to
tighten. As of October 31, 2006, allocations of
5 Advance refundings, also known as pre-refundings or refinancings, occur
when an issuer sells new bonds and uses the proceeds to fund principal and
interest payments of older existing bonds. This process often results in
lower borrowing costs for bond issuers.
8
bonds rated BBB or lower and non-rated bonds accounted for 12% of NPP's and
NMO's portfolio, 15% of NAD and NZF, 19% of NMA, and 20% of NXZ, including an 8%
allocation to bonds rated BB or lower, which helped to boost this Fund's annual
performance.
Among the lower-rated holdings making positive contributions to the Funds' total
returns for this period were industrial development and resource recovery bonds
and health care (including hospitals) credits, which ranked as the top
performing revenue sectors in the Lehman Brothers Municipal Bond Index. Bonds
backed by the 1998 master tobacco settlement agreement, which are generally
rated BBB, also contributed to the Funds' performances. These bonds comprised
approximately 4% to 6% of the portfolios of these six Funds as of October 31,
2006.
Another factor in the annual performance of these Funds, especially relative to
that of the unleveraged Lehman Brothers Municipal Bond Index, was the use of
financial leverage. While leveraging can add volatility to a Fund's NAV and
share price, this strategy can also provide opportunities for additional income
and total return for common shareholders. Over this 12-month reporting period,
the Funds' performances were positively impacted by the leveraging strategy,
although not to the extent we have seen in past years. Over the long term, we
firmly believe that the use of financial leverage should continue to work to the
benefit of these Funds. This is demonstrated by the total return
performances--both absolute and relative to the Lehman Brothers Municipal Bond
Index--of all six Funds over the 5-year period and of NPP, NMA, and NMO over the
10-year period ended October 31, 2006.
We also continued to see positive contributions from advance refunding activity,
which benefited these Funds through price appreciation and enhanced credit
quality. While advance refundings generally enhanced performance for this
12-month period, the Funds' holdings of older, previously pre-refunded bonds
tended to underperform the general municipal market, due primarily to their
shorter effective maturities. Among the Funds in this report, the three older
Funds--NPP, NMA, and NMO--had the largest allocations of pre-refunded bonds
going into this period.
9
HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF
OCTOBER 31, 2006?
Maintaining strong credit quality remained an important requirement. As of
October 31, 2006, all six of these Funds continued to offer excellent credit
quality, with allocations of bonds rated AAA/U.S. guaranteed and AA ranging from
69% in NXZ to 79% in NMA, 83% in NAD and NZF, 84% in NPP, and 85% in NMO.
At the end of October 2006, potential call exposure for the period November 2006
through the end of 2007 ranged from 7% in NXZ and NZF and 8% in NMO to 12% in
NPP, 13% in NAD, and 16% in NMA. The number of actual bond calls in all of these
Funds depends largely on future market interest rates.
10
Dividend and Share Price
INFORMATION
As previously noted, these six Funds use leverage to potentially enhance
opportunities for additional income for common shareholders. The benefits of
leveraging are tied in part to the short-term rates that leveraged Funds pay
their MuniPreferred shareholders. During periods of low short-term rates, these
Funds generally pay lower dividends to their MuniPreferred shareholders, which
can leave more earnings to support common share dividends. Conversely, when
short-term interest rates rise, as they did during this reporting period, the
Funds' borrowing costs also rise, impacting their income streams and reducing
the extent of the benefits of leveraging. The Funds' income streams were also
impacted as the proceeds from older, higher-yielding bonds that matured, were
called, or were sold were reinvested then into bonds currently available in the
market, which generally offered lower yields. These factors resulted in one
monthly dividend reduction in NZF, two in NMA and NMO, and three in NPP, NAD,
and NXZ over the 12-month period ended October 31, 2006.
Due to capital gains generated by normal portfolio activity, common shareholders
of the following Funds received capital gains and/or net ordinary income
distributions at the end of December 2005, as follows:
LONG-TERM CAPITAL GAINS ORDINARY INCOME
(PER SHARE) (PER SHARE)
--------------------------------------------------------------------------------
NPP $0.0174 $0.0001
--------------------------------------------------------------------------------
NMA $0.0116 $0.0030
--------------------------------------------------------------------------------
NMO -- $0.0036
--------------------------------------------------------------------------------
All of the Funds in this report seek to pay stable dividends at rates that
reflect each Fund's past results and projected future performance. During
certain periods, each Fund may pay dividends at a rate that may be more or less
than the amount of net investment income actually earned by the Fund during the
period. If a Fund has cumulatively earned more than it has paid in dividends, it
holds the excess in reserve as undistributed net investment income (UNII) as
part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in
excess of its earnings, the excess constitutes negative UNII that is likewise
reflected in the Fund's NAV. Each Fund will, over time, pay all of its net
investment income as dividends to shareholders. As of October 31, 2006, all of
the Funds in this report had positive UNII balances for both financial statement
and tax purposes.
11
At the end of the reporting period, the Funds' share prices were trading at
premiums or discounts to their NAVs as shown in the accompanying chart:
10/31/06 12-MONTH
PREMIUM/DISCOUNT AVERAGE PREMIUM/DISCOUNT
--------------------------------------------------------------------------------
NPP -4.37% -4.99%
--------------------------------------------------------------------------------
NMA -0.19% -1.55%
--------------------------------------------------------------------------------
NMO -2.66% -5.27%
--------------------------------------------------------------------------------
NAD -1.54% -3.38%
--------------------------------------------------------------------------------
NXZ +3.00% +3.46%
--------------------------------------------------------------------------------
NZF +2.19% -0.92%
--------------------------------------------------------------------------------
12
Nuveen Performance Plus Municipal Fund, Inc.
NPP
Performance
OVERVIEW As of October 31, 2006
--------------------------------------------------------------------------------
[PIE CHART]
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 76%
AA 8%
A 4%
BBB 8%
BB or Lower 2%
N/R 2%
--------------------------------------------------------------------------------
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE 2
[BAR CHART]
0.0745 0.0745 0.0745 0.0745 0.0705 0.0705 0.0705 0.0670 0.0670 0.0670 0.0640 0.0640
-------------------------------------------------------------------------------------------------------
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
SHARE PRICE PERFORMANCE
[LINE CHART]
Weekly
Closing
Date Price
---------- ---------
11/01/05 $ 14.50
$ 14.48
$ 14.44
$ 14.45
$ 14.44
$ 14.48
$ 14.33
$ 14.09
$ 14.07
$ 13.85
$ 13.93
$ 14.01
$ 14.05
$ 14.09
$ 14.08
$ 14.06
$ 14.01
$ 14.03
$ 14.18
$ 14.13
$ 14.15
$ 14.18
$ 14.20
$ 14.20
$ 14.21
$ 14.23
$ 14.29
$ 14.36
$ 14.45
$ 14.26
$ 14.20
$ 14.24
$ 14.19
$ 14.18
$ 14.14
$ 14.13
$ 14.21
$ 14.30
$ 14.38
$ 14.42
$ 14.49
$ 14.70
$ 14.70
$ 14.79
$ 14.90
$ 14.96
$ 14.91
$ 15.00
$ 15.12
$ 15.11
$ 15.11
$ 15.13
$ 15.08
$ 15.04
$ 15.06
$ 15.03
$ 15.05
$ 14.98
$ 14.99
$ 14.97
$ 15.11
$ 15.15
$ 15.22
$ 15.14
$ 15.13
$ 15.15
$ 15.08
$ 15.12
$ 15.04
$ 15.06
$ 15.02
$ 14.91
$ 14.93
$ 14.94
$ 15.01
$ 15.11
$ 15.16
$ 15.25
$ 15.21
$ 15.22
$ 15.23
$ 15.24
$ 15.22
$ 15.23
$ 15.10
$ 15.00
$ 14.96
$ 14.96
$ 15.11
$ 15.04
$ 15.05
$ 15.08
$ 15.02
$ 15.18
$ 15.10
$ 15.21
$ 15.35
$ 15.45
$ 15.38
$ 15.34
$ 15.21
$ 15.14
$ 15.21
$ 15.07
$ 15.08
$ 15.13
$ 15.10
$ 14.98
$ 14.93
$ 14.87
$ 14.82
$ 14.62
$ 14.65
$ 14.64
$ 14.54
$ 14.53
$ 14.50
$ 14.44
$ 14.35
$ 14.40
$ 14.36
$ 14.43
$ 14.45
$ 14.51
$ 14.51
$ 14.53
$ 14.55
$ 14.50
$ 14.52
$ 14.55
$ 14.54
$ 14.51
$ 14.58
$ 14.40
$ 14.40
$ 14.45
$ 14.49
$ 14.39
$ 14.38
$ 14.36
$ 14.34
$ 14.36
$ 14.40
$ 14.42
$ 14.45
$ 14.46
$ 14.50
$ 14.59
$ 14.62
$ 14.50
$ 14.53
$ 14.51
$ 14.51
$ 14.57
$ 14.55
$ 14.45
$ 14.38
$ 14.39
$ 14.39
$ 14.43
$ 14.35
$ 14.34
$ 14.26
$ 14.24
$ 14.25
$ 14.13
$ 14.20
$ 14.28
$ 14.28
$ 14.33
$ 14.39
$ 14.41
$ 14.46
$ 14.45
$ 14.41
$ 14.31
$ 14.30
$ 14.36
$ 14.35
$ 14.33
$ 14.40
$ 14.38
$ 14.34
$ 14.43
$ 14.47
$ 14.54
$ 14.75
$ 14.78
$ 14.82
$ 14.90
$ 14.85
$ 14.87
$ 14.85
$ 14.74
$ 14.79
$ 14.77
$ 14.82
$ 14.70
$ 14.65
$ 14.83
$ 14.88
$ 14.87
$ 14.91
$ 14.89
$ 14.93
$ 14.90
$ 14.98
$ 14.92
$ 14.93
$ 14.97
$ 15.00
$ 14.98
$ 14.94
$ 14.98
$ 14.96
$ 15.03
$ 15.13
$ 15.10
$ 15.11
$ 15.00
$ 14.95
$ 14.96
$ 14.94
$ 14.94
$ 14.92
$ 14.93
$ 14.95
$ 14.97
$ 14.95
$ 14.99
$ 14.97
$ 15.00
$ 15.00
$ 14.98
$ 14.97
$ 14.95
$ 14.95
$ 14.97
$ 14.93
$ 14.92
$ 14.84
$ 14.84
$ 14.70
$ 14.69
$ 14.80
$ 14.77
$ 14.81
$ 14.90
$ 14.88
$ 14.96
$ 15.04
$ 15.01
$ 15.08
$ 15.08
10/31/06 $ 15.09
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend
income, the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders capital gains and net ordinary income
distributions in December 2005 of $0.0175 per share.
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 15.09
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 15.78
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -4.37%
--------------------------------------------------------------------------------
Market Yield 5.09%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield 1 7.07%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $945,222
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 15.58
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 8.39
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 6/22/89)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 10.78% 7.50%
--------------------------------------------------------------------------------
5-Year 7.35% 6.51%
--------------------------------------------------------------------------------
10-Year 6.57% 6.75%
--------------------------------------------------------------------------------
STATES
(as a % of total investments)
--------------------------------------------------------------------------------
Illinois 14.7%
--------------------------------------------------------------------------------
California 10.0%
--------------------------------------------------------------------------------
New York 6.6%
--------------------------------------------------------------------------------
New Jersey 6.0%
--------------------------------------------------------------------------------
Michigan 4.5%
--------------------------------------------------------------------------------
Indiana 4.4%
--------------------------------------------------------------------------------
Texas 4.4%
--------------------------------------------------------------------------------
Florida 4.2%
--------------------------------------------------------------------------------
Colorado 4.1%
--------------------------------------------------------------------------------
Massachusetts 3.8%
--------------------------------------------------------------------------------
Washington 3.3%
--------------------------------------------------------------------------------
Utah 2.9%
--------------------------------------------------------------------------------
South Carolina 2.9%
--------------------------------------------------------------------------------
Ohio 2.4%
--------------------------------------------------------------------------------
Pennsylvania 2.3%
--------------------------------------------------------------------------------
Georgia 2.2%
--------------------------------------------------------------------------------
Minnesota 2.0%
--------------------------------------------------------------------------------
Louisiana 2.0%
--------------------------------------------------------------------------------
Nevada 1.6%
--------------------------------------------------------------------------------
Wisconsin 1.4%
--------------------------------------------------------------------------------
Other 14.3%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 24.2%
--------------------------------------------------------------------------------
Tax Obligation/Limited 15.9%
--------------------------------------------------------------------------------
Tax Obligation/General 15.0%
--------------------------------------------------------------------------------
Transportation 10.0%
--------------------------------------------------------------------------------
Utilities 9.8%
--------------------------------------------------------------------------------
Health Care 8.3%
--------------------------------------------------------------------------------
Consumer Staples 5.5%
--------------------------------------------------------------------------------
Other 11.3%
--------------------------------------------------------------------------------
13
Nuveen Municipal Advantage Fund, Inc.
NMA
Performance
OVERVIEW As of October 31, 2006
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 15.85
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 15.88
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -0.19%
--------------------------------------------------------------------------------
Market Yield 5.41%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield 1 7.51%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $683,675
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 16.15
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 8.09
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 12/19/89)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 10.68% 7.16%
--------------------------------------------------------------------------------
5-Year 8.31% 7.03%
--------------------------------------------------------------------------------
10-Year 7.36% 6.95%
--------------------------------------------------------------------------------
STATES
(as a % of total investments)
--------------------------------------------------------------------------------
Texas 11.3%
--------------------------------------------------------------------------------
New York 11.0%
--------------------------------------------------------------------------------
Illinois 10.8%
--------------------------------------------------------------------------------
Washington 9.6%
--------------------------------------------------------------------------------
California 8.0%
--------------------------------------------------------------------------------
Louisiana 6.2%
--------------------------------------------------------------------------------
Colorado 4.5%
--------------------------------------------------------------------------------
Tennessee 3.6%
--------------------------------------------------------------------------------
Ohio 3.0%
--------------------------------------------------------------------------------
South Carolina 2.8%
--------------------------------------------------------------------------------
New Jersey 2.6%
--------------------------------------------------------------------------------
Nevada 2.4%
--------------------------------------------------------------------------------
Indiana 2.4%
--------------------------------------------------------------------------------
Alabama 2.1%
--------------------------------------------------------------------------------
Wisconsin 2.0%
--------------------------------------------------------------------------------
North Carolina 1.7%
--------------------------------------------------------------------------------
Oklahoma 1.5%
--------------------------------------------------------------------------------
Other 14.5%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 28.6%
--------------------------------------------------------------------------------
Utilities 15.1%
--------------------------------------------------------------------------------
Transportation 10.6%
--------------------------------------------------------------------------------
Health Care 9.9%
--------------------------------------------------------------------------------
Tax Obligation/Limited 9.8%
--------------------------------------------------------------------------------
Tax Obligation/General 8.1%
--------------------------------------------------------------------------------
Consumer Staples 5.5%
--------------------------------------------------------------------------------
Housing/Single Family 5.1%
--------------------------------------------------------------------------------
Other 7.3%
--------------------------------------------------------------------------------
[PIE CHART]
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 71%
AA 8%
A 2%
BBB 16%
BB or Lower 3%
--------------------------------------------------------------------------------
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE 2
[BAR CHART]
0.0795 0.0795 0.0795 0.0795 0.0755 0.0755 0.0755 0.0715 0.0715 0.0715 0.0715 0.0715
-------------------------------------------------------------------------------------------------------
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
SHARE PRICE PERFORMANCE
[LINE CHART]
Weekly
Closing
Date Price
---------- ---------
11/01/05 $ 15.27
$ 15.20
$ 15.24
$ 15.20
$ 15.21
$ 15.25
$ 15.22
$ 15.19
$ 15.23
$ 15.09
$ 15.08
$ 15.08
$ 15.12
$ 15.12
$ 15.01
$ 14.99
$ 15.00
$ 15.03
$ 15.09
$ 15.13
$ 15.05
$ 15.10
$ 15.14
$ 15.12
$ 15.22
$ 15.21
$ 15.27
$ 15.45
$ 15.38
$ 15.14
$ 15.19
$ 15.07
$ 15.06
$ 14.98
$ 15.02
$ 15.03
$ 15.01
$ 15.18
$ 15.20
$ 15.18
$ 15.35
$ 15.38
$ 15.38
$ 15.42
$ 15.45
$ 15.70
$ 15.65
$ 15.70
$ 15.77
$ 15.81
$ 15.72
$ 15.43
$ 15.64
$ 15.71
$ 15.89
$ 15.92
$ 15.85
$ 15.91
$ 15.95
$ 15.94
$ 15.98
$ 16.05
$ 16.02
$ 16.01
$ 16.00
$ 15.66
$ 15.63
$ 15.68
$ 15.69
$ 15.68
$ 15.79
$ 15.60
$ 15.63
$ 15.61
$ 15.77
$ 15.77
$ 15.80
$ 15.75
$ 15.95
$ 15.82
$ 15.86
$ 15.92
$ 15.93
$ 15.94
$ 15.70
$ 15.45
$ 15.38
$ 15.46
$ 15.55
$ 15.58
$ 15.49
$ 15.46
$ 15.43
$ 15.57
$ 15.52
$ 15.50
$ 15.50
$ 15.47
$ 15.49
$ 15.46
$ 15.47
$ 15.55
$ 15.49
$ 15.45
$ 15.46
$ 15.51
$ 15.53
$ 15.46
$ 15.47
$ 15.35
$ 15.25
$ 15.13
$ 15.17
$ 15.29
$ 15.15
$ 15.22
$ 15.23
$ 15.14
$ 15.15
$ 15.17
$ 15.12
$ 15.17
$ 15.15
$ 15.17
$ 15.17
$ 15.24
$ 15.25
$ 15.29
$ 15.31
$ 15.33
$ 15.43
$ 15.33
$ 15.42
$ 15.30
$ 15.28
$ 15.34
$ 15.36
$ 15.29
$ 15.32
$ 15.35
$ 15.34
$ 15.36
$ 15.32
$ 15.28
$ 15.28
$ 15.35
$ 15.27
$ 15.40
$ 15.37
$ 15.31
$ 15.33
$ 15.25
$ 15.29
$ 15.25
$ 15.27
$ 15.15
$ 15.06
$ 15.05
$ 15.10
$ 15.04
$ 15.03
$ 14.90
$ 14.86
$ 14.80
$ 14.81
$ 14.81
$ 14.82
$ 14.80
$ 14.90
$ 14.99
$ 14.98
$ 14.88
$ 14.97
$ 14.90
$ 14.93
$ 14.86
$ 14.94
$ 14.87
$ 14.78
$ 14.72
$ 14.86
$ 14.81
$ 14.85
$ 15.00
$ 15.01
$ 15.05
$ 15.15
$ 15.17
$ 15.18
$ 15.35
$ 15.39
$ 15.34
$ 15.40
$ 15.25
$ 15.36
$ 15.44
$ 15.50
$ 15.52
$ 15.41
$ 15.44
$ 15.46
$ 15.42
$ 15.50
$ 15.49
$ 15.46
$ 15.46
$ 15.47
$ 15.47
$ 15.59
$ 15.50
$ 15.53
$ 15.54
$ 15.60
$ 15.62
$ 15.58
$ 15.54
$ 15.56
$ 15.57
$ 15.61
$ 15.59
$ 15.42
$ 15.38
$ 15.42
$ 15.39
$ 15.46
$ 15.48
$ 15.50
$ 15.57
$ 15.58
$ 15.73
$ 15.75
$ 15.72
$ 15.72
$ 15.80
$ 15.85
$ 15.82
$ 15.87
$ 15.88
$ 15.84
$ 15.81
$ 15.67
$ 15.71
$ 15.62
$ 15.59
$ 15.60
$ 15.71
$ 15.72
$ 15.70
$ 15.77
$ 15.77
$ 15.85
$ 15.85
$ 15.87
$ 15.87
10/31/06 $ 15.85
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend
income, the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders capital gains and net ordinary income
distributions in December 2005 of $0.0146 per share.
14
Nuveen Municipal Market Opportunity Fund, Inc.
NMO
Performance
OVERVIEW As of October 31, 2006
--------------------------------------------------------------------------------
[PIE CHART]
CREDIT QUALITY
(as a % of total municipal bonds)
AAA/U.S. Guaranteed 77%
AA 8%
A 3%
BBB 8%
BB or Lower 3%
N/R 1%
--------------------------------------------------------------------------------
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE 2
[BAR CHART]
0.0725 0.0725 0.0725 0.0725 0.0685 0.0685 0.0685 0.0660 0.0660 0.0660 0.0660 0.0660
-------------------------------------------------------------------------------------------------------
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
SHARE PRICE PERFORMANCE
[LINE CHART]
Weekly
Closing
Date Price
---------- ---------
11/01/05 $ 14.17
$ 14.18
$ 14.15
$ 14.21
$ 14.28
$ 14.26
$ 13.96
$ 13.83
$ 13.80
$ 13.53
$ 13.53
$ 13.69
$ 13.76
$ 13.65
$ 13.69
$ 13.65
$ 13.65
$ 13.64
$ 13.70
$ 13.76
$ 13.82
$ 13.86
$ 13.91
$ 13.98
$ 14.04
$ 14.01
$ 14.04
$ 14.04
$ 14.04
$ 13.77
$ 13.81
$ 13.87
$ 13.84
$ 13.82
$ 13.86
$ 13.88
$ 13.94
$ 13.97
$ 14.18
$ 14.18
$ 14.32
$ 14.47
$ 14.47
$ 14.51
$ 14.59
$ 14.72
$ 14.59
$ 14.77
$ 14.66
$ 14.60
$ 14.60
$ 14.53
$ 14.40
$ 14.52
$ 14.65
$ 14.64
$ 14.59
$ 14.54
$ 14.48
$ 14.58
$ 14.59
$ 14.63
$ 14.69
$ 14.76
$ 14.72
$ 14.67
$ 14.54
$ 14.52
$ 14.51
$ 14.60
$ 14.54
$ 14.46
$ 14.47
$ 14.48
$ 14.61
$ 14.59
$ 14.67
$ 14.72
$ 14.68
$ 14.77
$ 14.79
$ 14.84
$ 14.78
$ 14.74
$ 14.64
$ 14.57
$ 14.54
$ 14.52
$ 14.53
$ 14.49
$ 14.55
$ 14.46
$ 14.50
$ 14.62
$ 14.65
$ 14.51
$ 14.55
$ 14.60
$ 14.55
$ 14.53
$ 14.50
$ 14.58
$ 14.60
$ 14.53
$ 14.65
$ 14.65
$ 14.65
$ 14.53
$ 14.43
$ 14.36
$ 14.22
$ 14.10
$ 14.04
$ 14.11
$ 13.96
$ 14.10
$ 14.10
$ 14.13
$ 14.05
$ 14.12
$ 13.98
$ 14.03
$ 14.11
$ 14.09
$ 14.09
$ 14.12
$ 14.13
$ 14.15
$ 14.11
$ 14.10
$ 14.17
$ 14.15
$ 14.13
$ 14.08
$ 14.14
$ 14.24
$ 14.38
$ 14.31
$ 14.49
$ 14.34
$ 14.23
$ 14.19
$ 14.28
$ 14.22
$ 14.20
$ 14.21
$ 14.27
$ 14.34
$ 14.30
$ 14.19
$ 14.21
$ 14.13
$ 14.10
$ 14.17
$ 14.11
$ 14.00
$ 14.08
$ 14.02
$ 14.11
$ 14.05
$ 14.03
$ 14.00
$ 13.85
$ 13.85
$ 13.80
$ 13.84
$ 13.73
$ 13.76
$ 13.79
$ 13.97
$ 13.97
$ 13.94
$ 13.88
$ 13.90
$ 13.90
$ 13.89
$ 13.97
$ 13.93
$ 13.89
$ 13.89
$ 13.89
$ 13.81
$ 13.84
$ 13.99
$ 13.90
$ 13.99
$ 14.10
$ 14.19
$ 14.32
$ 14.33
$ 14.41
$ 14.41
$ 14.42
$ 14.42
$ 14.41
$ 14.45
$ 14.52
$ 14.47
$ 14.43
$ 14.55
$ 14.57
$ 14.60
$ 14.61
$ 14.63
$ 14.63
$ 14.56
$ 14.59
$ 14.60
$ 14.56
$ 14.61
$ 14.64
$ 14.64
$ 14.61
$ 14.58
$ 14.49
$ 14.53
$ 14.58
$ 14.63
$ 14.63
$ 14.63
$ 14.62
$ 14.67
$ 14.67
$ 14.68
$ 14.63
$ 14.69
$ 14.90
$ 14.77
$ 14.82
$ 14.95
$ 14.90
$ 14.96
$ 14.96
$ 14.93
$ 14.95
$ 14.98
$ 14.97
$ 15.02
$ 14.93
$ 14.92
$ 14.81
$ 14.80
$ 14.62
$ 14.60
$ 14.55
$ 14.58
$ 14.65
$ 14.65
$ 14.75
$ 14.80
$ 14.87
$ 14.82
$ 14.90
$ 14.92
10/31/06 $ 15.00
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend
income, the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders a net ordinary income distribution in December
2005 of $0.0036 per share.
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 15.00
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 15.41
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -2.66%
--------------------------------------------------------------------------------
Market Yield 5.28%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield 1 7.33%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $701,559
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 13.78
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 8.17
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/21/90)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 11.92% 7.49%
--------------------------------------------------------------------------------
5-Year 7.06% 6.46%
--------------------------------------------------------------------------------
10-Year 6.52% 6.28%
--------------------------------------------------------------------------------
STATES
(as a % of total municipal bonds)
--------------------------------------------------------------------------------
Texas 16.8%
--------------------------------------------------------------------------------
Washington 11.6%
--------------------------------------------------------------------------------
New York 9.5%
--------------------------------------------------------------------------------
Illinois 8.1%
--------------------------------------------------------------------------------
California 5.7%
--------------------------------------------------------------------------------
Minnesota 5.1%
--------------------------------------------------------------------------------
South Carolina 4.9%
--------------------------------------------------------------------------------
New Jersey 4.1%
--------------------------------------------------------------------------------
Colorado 3.5%
--------------------------------------------------------------------------------
Nevada 3.0%
--------------------------------------------------------------------------------
Georgia 3.0%
--------------------------------------------------------------------------------
Massachusetts 2.9%
--------------------------------------------------------------------------------
North Dakota 2.8%
--------------------------------------------------------------------------------
Pennsylvania 2.5%
--------------------------------------------------------------------------------
Ohio 2.0%
--------------------------------------------------------------------------------
Other 14.5%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 34.0%
--------------------------------------------------------------------------------
Transportation 15.2%
--------------------------------------------------------------------------------
Tax Obligation/General 15.1%
--------------------------------------------------------------------------------
Tax Obligation/Limited 8.3%
--------------------------------------------------------------------------------
Utilities 6.8%
--------------------------------------------------------------------------------
Health Care 6.6%
--------------------------------------------------------------------------------
Consumer Staples 5.1%
--------------------------------------------------------------------------------
Other 8.9%
--------------------------------------------------------------------------------
15
Nuveen Dividend Advantage Municipal Fund
NAD
Performance
OVERVIEW As of October 31, 2006
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 15.30
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 15.54
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -1.54%
--------------------------------------------------------------------------------
Market Yield 5.41%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield 1 7.51%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $610,316
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 15.24
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 7.55
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 5/26/99)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 11.19% 7.59%
--------------------------------------------------------------------------------
5-Year 6.86% 7.50%
--------------------------------------------------------------------------------
Since
Inception 6.81% 7.61%
--------------------------------------------------------------------------------
STATES
(as a % of total investments)
--------------------------------------------------------------------------------
Illinois 23.7%
--------------------------------------------------------------------------------
New York 10.5%
--------------------------------------------------------------------------------
Texas 10.4%
--------------------------------------------------------------------------------
Washington 7.8%
--------------------------------------------------------------------------------
Florida 5.3%
--------------------------------------------------------------------------------
Wisconsin 4.6%
--------------------------------------------------------------------------------
New Jersey 4.1%
--------------------------------------------------------------------------------
Pennsylvania 3.3%
--------------------------------------------------------------------------------
Louisiana 3.0%
--------------------------------------------------------------------------------
Ohio 2.7%
--------------------------------------------------------------------------------
Indiana 2.5%
--------------------------------------------------------------------------------
Michigan 2.5%
--------------------------------------------------------------------------------
Rhode Island 2.2%
--------------------------------------------------------------------------------
California 1.9%
--------------------------------------------------------------------------------
Massachusetts 1.6%
--------------------------------------------------------------------------------
Other 13.9%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 19.3%
--------------------------------------------------------------------------------
Tax Obligation/General 16.9%
--------------------------------------------------------------------------------
Tax Obligation/Limited 15.0%
--------------------------------------------------------------------------------
Health Care 12.6%
--------------------------------------------------------------------------------
Transportation 11.0%
--------------------------------------------------------------------------------
Utilities 7.2%
--------------------------------------------------------------------------------
Consumer Staples 6.4%
--------------------------------------------------------------------------------
Other 11.6%
--------------------------------------------------------------------------------
[PIE CHART]
CREDIT QUALITY
(as a % of total investment)
AAA/U.S. Guaranteed 73%
AA 10%
A 2%
BBB 7%
BB or Lower 5%
N/R 3%
--------------------------------------------------------------------------------
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE
[BAR CHART]
0.0790 0.0750 0.0750 0.0750 0.0715 0.0715 0.0715 0.0690 0.0690 0.0690 0.0690 0.0690
-------------------------------------------------------------------------------------------------------
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
SHARE PRICE PERFORMANCE
[LINE CHART]
Weekly
Closing
Date Price
---------- ---------
11/01/05 $ 14.56
$ 14.57
$ 14.63
$ 14.65
$ 14.64
$ 14.69
$ 14.55
$ 14.47
$ 14.48
$ 14.38
$ 14.30
$ 14.38
$ 14.39
$ 14.36
$ 14.37
$ 14.35
$ 14.38
$ 14.42
$ 14.49
$ 14.50
$ 14.56
$ 14.68
$ 14.60
$ 14.64
$ 14.60
$ 14.51
$ 14.50
$ 14.41
$ 14.37
$ 14.19
$ 14.25
$ 14.29
$ 14.22
$ 14.17
$ 14.18
$ 14.11
$ 14.20
$ 14.28
$ 14.25
$ 14.43
$ 14.56
$ 14.60
$ 14.60
$ 14.66
$ 14.77
$ 14.91
$ 15.09
$ 15.13
$ 15.15
$ 15.09
$ 15.06
$ 15.09
$ 15.02
$ 15.04
$ 15.04
$ 15.01
$ 15.12
$ 15.13
$ 15.15
$ 15.14
$ 15.20
$ 15.19
$ 15.25
$ 15.22
$ 15.16
$ 15.13
$ 15.10
$ 15.17
$ 15.09
$ 15.13
$ 15.10
$ 14.94
$ 14.86
$ 14.85
$ 14.87
$ 14.90
$ 15.00
$ 15.05
$ 15.15
$ 15.16
$ 15.20
$ 15.28
$ 15.27
$ 15.24
$ 15.22
$ 15.03
$ 15.05
$ 15.07
$ 15.07
$ 15.04
$ 14.91
$ 14.77
$ 14.79
$ 14.86
$ 14.89
$ 14.83
$ 14.78
$ 14.65
$ 14.66
$ 14.67
$ 14.67
$ 14.73
$ 14.77
$ 14.79
$ 14.84
$ 14.83
$ 14.85
$ 14.75
$ 14.61
$ 14.46
$ 14.44
$ 14.28
$ 14.34
$ 14.33
$ 14.30
$ 14.33
$ 14.39
$ 14.34
$ 14.37
$ 14.47
$ 14.46
$ 14.41
$ 14.36
$ 14.41
$ 14.41
$ 14.45
$ 14.54
$ 14.51
$ 14.50
$ 14.47
$ 14.52
$ 14.58
$ 14.68
$ 14.53
$ 14.51
$ 14.60
$ 14.72
$ 14.63
$ 14.62
$ 14.69
$ 14.68
$ 14.77
$ 14.74
$ 14.81
$ 14.84
$ 14.86
$ 14.87
$ 14.90
$ 14.93
$ 14.98
$ 15.02
$ 14.98
$ 14.70
$ 14.70
$ 14.71
$ 14.55
$ 14.47
$ 14.44
$ 14.39
$ 14.35
$ 14.35
$ 14.28
$ 14.24
$ 14.10
$ 14.13
$ 14.15
$ 14.12
$ 14.20
$ 14.27
$ 14.35
$ 14.30
$ 14.39
$ 14.42
$ 14.45
$ 14.46
$ 14.41
$ 14.46
$ 14.47
$ 14.49
$ 14.41
$ 14.46
$ 14.41
$ 14.45
$ 14.48
$ 14.44
$ 14.43
$ 14.46
$ 14.61
$ 14.74
$ 14.81
$ 14.79
$ 14.82
$ 14.80
$ 14.85
$ 14.86
$ 14.90
$ 14.91
$ 14.69
$ 14.69
$ 14.79
$ 14.85
$ 14.89
$ 14.86
$ 14.85
$ 14.85
$ 14.84
$ 14.89
$ 14.91
$ 14.88
$ 14.90
$ 14.98
$ 15.00
$ 15.10
$ 15.07
$ 14.96
$ 15.04
$ 15.07
$ 15.14
$ 15.12
$ 15.02
$ 15.00
$ 15.01
$ 15.06
$ 15.08
$ 15.05
$ 15.17
$ 15.10
$ 15.13
$ 15.25
$ 15.24
$ 15.19
$ 15.20
$ 15.20
$ 15.22
$ 15.22
$ 15.25
$ 15.29
$ 15.35
$ 15.36
$ 15.36
$ 15.23
$ 15.22
$ 15.12
$ 15.12
$ 15.12
$ 15.16
$ 15.18
$ 15.13
$ 15.14
$ 15.17
$ 15.17
$ 15.24
$ 15.22
$ 15.27
10/31/06 $ 15.30
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend
income, the Taxable-Equivalent Yield is lower.
16
Nuveen Dividend Advantage Municipal Fund 2
NXZ
Performance
OVERVIEW As of October 31, 2006
--------------------------------------------------------------------------------
[PIE CHART]
CREDIT QUALITY
(as a % of total municipal bonds)
AAA/U.S. Guaranteed 62%
AA 7%
A 11%
BBB 10%
BB or Lower 8%
N/R 2%
--------------------------------------------------------------------------------
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE
[BAR CHART]
0.0860 0.0860 0.0860 0.0860 0.0820 0.0820 0.0820 0.0795 0.0795 0.0795 0.0765 0.0765
-------------------------------------------------------------------------------------------------------
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
SHARE PRICE PERFORMANCE
[LINE CHART]
Weekly
Closing
Date Price
---------- ---------
11/01/05 $ 15.58
$ 15.71
$ 15.74
$ 15.80
$ 15.86
$ 15.99
$ 15.96
$ 15.80
$ 15.84
$ 15.74
$ 15.68
$ 15.74
$ 15.95
$ 15.90
$ 15.95
$ 16.01
$ 15.95
$ 16.00
$ 16.15
$ 16.30
$ 16.18
$ 16.21
$ 16.03
$ 16.02
$ 16.07
$ 16.12
$ 16.30
$ 16.18
$ 16.30
$ 15.95
$ 15.84
$ 16.12
$ 15.75
$ 15.88
$ 16.09
$ 16.11
$ 16.10
$ 16.13
$ 16.40
$ 16.39
$ 16.43
$ 16.47
$ 16.47
$ 16.54
$ 16.52
$ 16.55
$ 16.72
$ 16.75
$ 16.75
$ 16.57
$ 16.62
$ 16.50
$ 16.38
$ 16.53
$ 16.68
$ 16.80
$ 16.80
$ 16.82
$ 16.80
$ 16.88
$ 16.95
$ 17.20
$ 17.15
$ 17.01
$ 16.92
$ 16.75
$ 16.66
$ 16.70
$ 16.66
$ 16.13
$ 16.17
$ 16.00
$ 15.95
$ 15.95
$ 16.05
$ 16.14
$ 16.05
$ 16.15
$ 16.13
$ 16.19
$ 16.29
$ 16.30
$ 16.22
$ 16.25
$ 16.19
$ 16.19
$ 16.09
$ 16.13
$ 16.15
$ 16.15
$ 16.23
$ 16.15
$ 16.22
$ 16.38
$ 16.32
$ 16.38
$ 16.29
$ 16.27
$ 16.60
$ 16.55
$ 16.60
$ 16.56
$ 16.62
$ 16.56
$ 16.62
$ 16.68
$ 16.62
$ 16.65
$ 16.60
$ 16.40
$ 16.30
$ 16.16
$ 16.15
$ 16.08
$ 16.09
$ 16.19
$ 16.19
$ 16.15
$ 16.13
$ 16.36
$ 16.22
$ 16.05
$ 16.14
$ 16.20
$ 16.20
$ 16.28
$ 16.40
$ 16.33
$ 16.52
$ 16.53
$ 16.48
$ 16.48
$ 16.49
$ 16.26
$ 16.47
$ 16.41
$ 16.45
$ 16.42
$ 16.34
$ 16.39
$ 16.42
$ 16.35
$ 16.34
$ 16.43
$ 16.45
$ 16.26
$ 16.40
$ 16.35
$ 16.38
$ 16.32
$ 16.32
$ 16.45
$ 16.42
$ 16.38
$ 16.25
$ 16.20
$ 16.25
$ 16.26
$ 16.32
$ 16.23
$ 16.18
$ 16.24
$ 16.09
$ 16.01
$ 16.04
$ 16.21
$ 15.95
$ 16.11
$ 16.07
$ 16.08
$ 16.07
$ 16.07
$ 16.20
$ 16.20
$ 16.07
$ 16.03
$ 16.03
$ 16.06
$ 16.09
$ 16.00
$ 16.06
$ 16.19
$ 16.11
$ 16.14
$ 16.14
$ 16.23
$ 16.27
$ 16.27
$ 16.36
$ 16.41
$ 16.41
$ 16.39
$ 16.52
$ 16.42
$ 16.29
$ 16.29
$ 16.38
$ 16.32
$ 16.40
$ 16.45
$ 16.62
$ 16.59
$ 16.62
$ 16.64
$ 16.77
$ 16.79
$ 16.83
$ 16.83
$ 16.91
$ 17.00
$ 16.95
$ 16.96
$ 17.05
$ 16.99
$ 16.80
$ 16.74
$ 16.79
$ 16.78
$ 16.82
$ 16.75
$ 16.71
$ 16.68
$ 16.70
$ 16.72
$ 16.76
$ 16.78
$ 16.74
$ 16.76
$ 16.74
$ 16.76
$ 16.74
$ 16.69
$ 16.69
$ 16.73
$ 16.63
$ 16.70
$ 16.66
$ 16.74
$ 16.68
$ 16.65
$ 16.47
$ 16.50
$ 16.38
$ 16.32
$ 16.35
$ 16.34
$ 16.32
$ 16.35
$ 16.39
$ 16.37
$ 16.40
$ 16.47
$ 16.52
$ 16.55
10/31/06 $ 16.50
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend
income, the Taxable-Equivalent Yield is lower.
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 16.50
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 16.02
--------------------------------------------------------------------------------
Premium/(Discount) to NAV 3.00%
--------------------------------------------------------------------------------
Market Yield 5.56%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield 1 7.72%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $470,189
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 19.75
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 6.33
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/27/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 11.95% 7.86%
--------------------------------------------------------------------------------
5-Year 8.92% 8.02%
--------------------------------------------------------------------------------
Since
Inception 8.45% 8.69%
--------------------------------------------------------------------------------
STATES
(as a % of total municipal bonds)
--------------------------------------------------------------------------------
Texas 17.1%
--------------------------------------------------------------------------------
Michigan 9.7%
--------------------------------------------------------------------------------
Illinois 7.6%
--------------------------------------------------------------------------------
California 7.5%
--------------------------------------------------------------------------------
Colorado 4.6%
--------------------------------------------------------------------------------
New York 4.5%
--------------------------------------------------------------------------------
New Mexico 3.6%
--------------------------------------------------------------------------------
Washington 3.5%
--------------------------------------------------------------------------------
Florida 3.4%
--------------------------------------------------------------------------------
Missouri 3.3%
--------------------------------------------------------------------------------
Indiana 3.3%
--------------------------------------------------------------------------------
Louisiana 3.1%
--------------------------------------------------------------------------------
Alabama 2.9%
--------------------------------------------------------------------------------
Massachusetts 2.8%
--------------------------------------------------------------------------------
Nevada 2.8%
--------------------------------------------------------------------------------
Kansas 2.7%
--------------------------------------------------------------------------------
Oregon 2.6%
--------------------------------------------------------------------------------
Other 15.0%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 21.4%
--------------------------------------------------------------------------------
Health Care 17.2%
--------------------------------------------------------------------------------
Tax Obligation/Limited 16.0%
--------------------------------------------------------------------------------
Transportation 14.3%
--------------------------------------------------------------------------------
Utilities 7.0%
--------------------------------------------------------------------------------
Tax Obligation/General 5.9%
--------------------------------------------------------------------------------
Consumer Staples 5.1%
--------------------------------------------------------------------------------
Other 13.1%
--------------------------------------------------------------------------------
17
Nuveen Dividend Advantage Municipal Fund 3
NZF
Performance
OVERVIEW As of October 31, 2006
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 15.88
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 15.54
--------------------------------------------------------------------------------
Premium/(Discount) to NAV 2.19%
--------------------------------------------------------------------------------
Market Yield 5.52%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield 1 7.67%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $626,836
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 16.88
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 7.14
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 16.90% 7.57%
--------------------------------------------------------------------------------
5-Year 7.80% 7.95%
--------------------------------------------------------------------------------
Since
Inception 7.74% 7.99%
--------------------------------------------------------------------------------
STATES
(as a % of total municipal bonds)
--------------------------------------------------------------------------------
Texas 12.6%
--------------------------------------------------------------------------------
Illinois 12.0%
--------------------------------------------------------------------------------
Washington 10.4%
--------------------------------------------------------------------------------
California 7.7%
--------------------------------------------------------------------------------
Michigan 6.2%
--------------------------------------------------------------------------------
Nevada 5.2%
--------------------------------------------------------------------------------
Iowa 3.9%
--------------------------------------------------------------------------------
Indiana 3.9%
--------------------------------------------------------------------------------
Colorado 3.5%
--------------------------------------------------------------------------------
New York 3.2%
--------------------------------------------------------------------------------
Wisconsin 3.0%
--------------------------------------------------------------------------------
New Jersey 2.5%
--------------------------------------------------------------------------------
Louisiana 2.3%
--------------------------------------------------------------------------------
Kentucky 2.1%
--------------------------------------------------------------------------------
Alaska 1.8%
--------------------------------------------------------------------------------
Missouri 1.7%
--------------------------------------------------------------------------------
Oregon 1.7%
--------------------------------------------------------------------------------
Maryland 1.5%
--------------------------------------------------------------------------------
Other 14.8%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 20.5%
--------------------------------------------------------------------------------
Transportation 16.1%
--------------------------------------------------------------------------------
Health Care 16.0%
--------------------------------------------------------------------------------
Tax Obligation/General 9.5%
--------------------------------------------------------------------------------
Utilities 6.6%
--------------------------------------------------------------------------------
Water and Sewer 6.6%
--------------------------------------------------------------------------------
Education and Civic Organizations 5.6%
--------------------------------------------------------------------------------
Tax Obligation/Limited 5.5%
--------------------------------------------------------------------------------
Other 13.6%
--------------------------------------------------------------------------------
[PIE CHART]
CREDIT QUALITY
(as a % of total municipal bonds)
AAA/U.S. Guaranteed 74%
AA 9%
A 2%
BBB 7%
BB or Lower 3%
N/R 5%
--------------------------------------------------------------------------------
2005-2006 MONTHLY TAX-FREE DIVIDENDS PER SHARE
[BAR CHART]
0.0770 0.0770 0.0770 0.0770 0.0770 0.0770 0.0770 0.0730 0.0730 0.0730 0.0730 0.0730
-------------------------------------------------------------------------------------------------------
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
SHARE PRICE PERFORMANCE
[LINE CHART]
Weekly
Closing
Date Price
---------- ---------
11/01/05 $ 14.50
$ 14.52
$ 14.52
$ 14.55
$ 14.66
$ 14.61
$ 14.67
$ 14.53
$ 14.53
$ 14.49
$ 14.37
$ 14.54
$ 14.45
$ 14.50
$ 14.41
$ 14.43
$ 14.44
$ 14.42
$ 14.54
$ 14.52
$ 14.43
$ 14.46
$ 14.48
$ 14.55
$ 14.61
$ 14.48
$ 14.50
$ 14.66
$ 14.69
$ 14.46
$ 14.47
$ 14.40
$ 14.40
$ 14.39
$ 14.41
$ 14.42
$ 14.49
$ 14.61
$ 14.52
$ 14.71
$ 14.82
$ 14.91
$ 14.91
$ 14.99
$ 15.01
$ 15.15
$ 15.30
$ 15.30
$ 15.40
$ 15.25
$ 15.35
$ 15.26
$ 15.20
$ 15.16
$ 15.24
$ 15.28
$ 15.29
$ 15.38
$ 15.38
$ 15.31
$ 15.37
$ 15.40
$ 15.49
$ 15.45
$ 15.40
$ 15.38
$ 15.37
$ 15.40
$ 15.40
$ 15.41
$ 15.43
$ 15.35
$ 15.32
$ 15.33
$ 15.40
$ 15.35
$ 15.34
$ 15.15
$ 15.10
$ 15.15
$ 15.20
$ 15.21
$ 15.24
$ 15.15
$ 15.13
$ 15.17
$ 15.10
$ 15.12
$ 15.13
$ 15.19
$ 15.17
$ 15.19
$ 15.30
$ 15.34
$ 15.32
$ 15.33
$ 15.29
$ 15.35
$ 15.49
$ 15.45
$ 15.48
$ 15.45
$ 15.40
$ 15.28
$ 15.26
$ 15.35
$ 15.35
$ 15.40
$ 15.38
$ 15.32
$ 15.26
$ 15.29
$ 15.20
$ 15.25
$ 15.02
$ 15.08
$ 15.09
$ 15.05
$ 14.95
$ 15.00
$ 15.03
$ 15.00
$ 15.15
$ 15.10
$ 15.10
$ 15.30
$ 15.32
$ 15.37
$ 15.42
$ 15.47
$ 15.41
$ 15.42
$ 15.46
$ 15.40
$ 15.40
$ 15.58
$ 15.52
$ 15.37
$ 15.34
$ 15.42
$ 15.39
$ 15.40
$ 15.37
$ 15.39
$ 15.50
$ 15.42
$ 15.50
$ 15.57
$ 15.56
$ 15.43
$ 15.40
$ 15.40
$ 15.38
$ 15.35
$ 15.39
$ 15.15
$ 15.12
$ 15.09
$ 15.10
$ 15.03
$ 15.01
$ 15.02
$ 14.83
$ 14.79
$ 14.75
$ 14.55
$ 14.50
$ 14.65
$ 14.69
$ 14.82
$ 14.81
$ 14.90
$ 14.93
$ 14.92
$ 14.94
$ 14.85
$ 14.84
$ 14.88
$ 14.91
$ 14.91
$ 14.91
$ 14.91
$ 14.95
$ 15.03
$ 15.01
$ 15.10
$ 15.12
$ 15.30
$ 15.34
$ 15.36
$ 15.43
$ 15.36
$ 15.39
$ 15.28
$ 15.28
$ 15.25
$ 15.33
$ 15.24
$ 15.17
$ 15.24
$ 15.25
$ 15.30
$ 15.36
$ 15.36
$ 15.34
$ 15.36
$ 15.38
$ 15.37
$ 15.39
$ 15.43
$ 15.43
$ 15.46
$ 15.40
$ 15.40
$ 15.40
$ 15.43
$ 15.47
$ 15.54
$ 15.56
$ 15.53
$ 15.48
$ 15.56
$ 15.53
$ 15.55
$ 15.67
$ 15.65
$ 15.64
$ 15.67
$ 15.72
$ 15.73
$ 15.76
$ 15.74
$ 15.74
$ 15.78
$ 15.70
$ 15.80
$ 15.79
$ 15.82
$ 15.78
$ 15.82
$ 15.65
$ 15.71
$ 15.55
$ 15.52
$ 15.53
$ 15.56
$ 15.72
$ 15.68
$ 15.70
$ 15.63
$ 15.75
$ 15.80
$ 15.83
$ 15.80
10/31/06 $ 15.88
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend
income, the Taxable-Equivalent Yield is lower.
18
Shareholder
MEETING REPORT
The Annual Shareholder Meeting was held on August 1, 2006, at The Northern Trust
Company, 50 South LaSalle Street, Chicago, Illinois 60675.
NPP NMA NMO
------------------------------------------------------------------------------------------------------------------------------------
Common and Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting shares voting voting shares
together together together together together together
as a class as a class as a class as a class as a class as a class
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner
For 52,507,004 -- 34,217,676 -- 40,035,219 --
Withhold 510,531 -- 221,265 -- 284,538 --
------------------------------------------------------------------------------------------------------------------------------------
Total 53,017,535 -- 34,438,941 -- 40,319,757 --
====================================================================================================================================
Lawrence H. Brown
For 52,488,387 -- 34,224,946 -- 40,044,414 --
Withhold 529,148 -- 213,995 -- 275,343 --
------------------------------------------------------------------------------------------------------------------------------------
Total 53,017,535 -- 34,438,941 -- 40,319,757 --
====================================================================================================================================
Jack B. Evans
For 52,505,508 -- 34,207,335 -- 40,037,349 --
Withhold 512,027 -- 231,606 -- 282,408 --
------------------------------------------------------------------------------------------------------------------------------------
Total 53,017,535 -- 34,438,941 -- 40,319,757 --
====================================================================================================================================
William C. Hunter
For 52,510,395 -- 34,214,420 -- 40,036,552 --
Withhold 507,140 -- 224,521 -- 283,205 --
------------------------------------------------------------------------------------------------------------------------------------
Total 53,017,535 -- 34,438,941 -- 40,319,757 --
====================================================================================================================================
David J. Kundert
For 52,511,866 -- 34,211,931 -- 40,036,283 --
Withhold 505,669 -- 227,010 -- 283,474 --
------------------------------------------------------------------------------------------------------------------------------------
Total 53,017,535 -- 34,438,941 -- 40,319,757 --
====================================================================================================================================
William J. Schneider
For -- 16,963 -- 12,490 -- 14,056
Withhold -- 1 -- 6 -- 25
------------------------------------------------------------------------------------------------------------------------------------
Total -- 16,964 -- 12,496 -- 14,081
====================================================================================================================================
Timothy R. Schwertfeger
For -- 16,960 -- 12,489 -- 14,056
Withhold -- 4 -- 7 -- 25
------------------------------------------------------------------------------------------------------------------------------------
Total -- 16,964 -- 12,496 -- 14,081
====================================================================================================================================
Judith M. Stockdale
For 52,517,699 -- 34,239,485 -- 40,014,158 --
Withhold 499,836 -- 199,456 -- 305,599 --
------------------------------------------------------------------------------------------------------------------------------------
Total 53,017,535 -- 34,438,941 -- 40,319,757 --
====================================================================================================================================
Eugene S. Sunshine
For 52,505,605 -- 34,217,653 -- 40,039,911 --
Withhold 511,930 -- 221,288 -- 279,846 --
------------------------------------------------------------------------------------------------------------------------------------
Total 53,017,535 -- 34,438,941 -- 40,319,757 --
====================================================================================================================================
19
Shareholder
MEETING REPORT (continued)
NAD NXZ NZF
------------------------------------------------------------------------------------------------------------------------------------
Common and Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting shares voting voting shares
together together together together together together
as a class as a class as a class as a class as a class as a class
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner
For 37,392,215 -- 28,036,570 -- 38,043,001 --
Withhold 289,959 -- 108,803 -- 325,299 --
------------------------------------------------------------------------------------------------------------------------------------
Total 37,682,174 -- 28,145,373 -- 38,368,300 --
====================================================================================================================================
Lawrence H. Brown
For 37,375,705 -- 28,031,579 -- 38,023,161 --
Withhold 306,469 -- 113,794 -- 345,139 --
------------------------------------------------------------------------------------------------------------------------------------
Total 37,682,174 -- 28,145,373 -- 38,368,300 --
====================================================================================================================================
Jack B. Evans
For 37,389,171 -- 28,043,178 -- 38,042,068 --
Withhold 293,003 -- 102,195 -- 326,232 --
------------------------------------------------------------------------------------------------------------------------------------
Total 37,682,174 -- 28,145,373 -- 38,368,300 --
====================================================================================================================================
William C. Hunter
For 37,391,817 -- 28,045,340 -- 38,045,034 --
Withhold 290,357 -- 100,033 -- 323,266 --
------------------------------------------------------------------------------------------------------------------------------------
Total 37,682,174 -- 28,145,373 -- 38,368,300 --
====================================================================================================================================
David J. Kundert
For 37,387,918 -- 28,045,340 -- 38,046,584 --
Withhold 294,256 -- 100,033 -- 321,716 --
------------------------------------------------------------------------------------------------------------------------------------
Total 37,682,174 -- 28,145,373 -- 38,368,300 --
====================================================================================================================================
William J. Schneider
For -- 11,080 -- 8,307 -- 11,363
Withhold -- 32 -- 65 -- 14
------------------------------------------------------------------------------------------------------------------------------------
Total -- 11,112 -- 8,372 -- 11,377
====================================================================================================================================
Timothy R. Schwertfeger
For -- 11,083 -- 8,307 -- 11,363
Withhold -- 29 -- 65 -- 14
------------------------------------------------------------------------------------------------------------------------------------
Total -- 11,112 -- 8,372 -- 11,377
====================================================================================================================================
Judith M. Stockdale
For 37,398,427 -- 28,034,169 -- 38,039,635 --
Withhold 283,747 -- 111,204 -- 328,665 --
------------------------------------------------------------------------------------------------------------------------------------
Total 37,682,174 -- 28,145,373 -- 38,368,300 --
====================================================================================================================================
Eugene S. Sunshine
For 37,393,127 -- 28,043,432 -- 38,045,784 --
Withhold 289,047 -- 101,941 -- 322,516 --
------------------------------------------------------------------------------------------------------------------------------------
Total 37,682,174 -- 28,145,373 -- 38,368,300 --
====================================================================================================================================
20
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS, TRUSTEES AND SHAREHOLDERS
NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC.
NUVEEN MUNICIPAL ADVANTAGE FUND, INC.
NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC.
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 3
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Performance Plus Municipal Fund, Inc.,
Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal Market Opportunity Fund,
Inc., Nuveen Dividend Advantage Municipal Fund, Nuveen Dividend Advantage
Municipal Fund 2 and Nuveen Dividend Advantage Municipal Fund 3 (the "Funds") as
of October 31, 2006, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2006, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund,
Inc., Nuveen Municipal Market Opportunity Fund, Inc., Nuveen Dividend Advantage
Municipal Fund, Nuveen Dividend Advantage Municipal Fund 2 and Nuveen Dividend
Advantage Municipal Fund 3 at October 31, 2006, the results of their operations
for the year then ended, changes in their net assets for each of the two years
in the period then ended, and the financial highlights for each of the five
years in the period then ended in conformity with U.S. generally accepted
accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
December 14, 2006
21
Nuveen Performance Plus Municipal Fund, Inc. (NPP)
Portfolio of
INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 1.1% (0.7% OF TOTAL INVESTMENTS)
Jefferson County, Alabama, Sewer Revenue Refunding Warrants,
Series 1997A:
$ 3,640 5.625%, 2/01/22 (Pre-refunded 2/01/07) - FGIC Insured 2/07 at 101.00 AAA $ 3,694,564
3,820 5.375%, 2/01/27 (Pre-refunded 2/01/07) - FGIC Insured 2/07 at 100.00 AAA 3,837,075
Jefferson County, Alabama, Sewer Revenue Refunding Warrants,
Series 1997A:
1,435 5.625%, 2/01/22 - FGIC Insured 2/07 at 101.00 AAA 1,456,138
1,505 5.375%, 2/01/27 - FGIC Insured 2/07 at 100.00 AAA 1,510,990
------------------------------------------------------------------------------------------------------------------------------------
10,400 Total Alabama 10,498,767
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.3% (0.9% OF TOTAL INVESTMENTS)
1,000 Arizona State Transportation Board, Highway Revenue Bonds, 7/12 at 100.00 AAA 1,084,650
Series 2002B, 5.250%, 7/01/22 (Pre-refunded 7/01/12)
Phoenix, Arizona, Civic Improvement Corporation, Senior
Lien Airport Revenue Bonds, Series 2002B:
5,365 5.750%, 7/01/15 - FGIC Insured (Alternative Minimum Tax) 7/12 at 100.00 AAA 5,867,808
5,055 5.750%, 7/01/16 - FGIC Insured (Alternative Minimum Tax) 7/12 at 100.00 AAA 5,534,113
------------------------------------------------------------------------------------------------------------------------------------
11,420 Total Arizona 12,486,571
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.7% (0.5% OF TOTAL INVESTMENTS)
5,080 Independence County, Arkansas, Hydroelectric Power Revenue Bonds, 5/13 at 100.00 A 5,331,257
Series 2003, 5.350%, 5/01/28 - ACA Insured
1,000 Washington County, Arkansas, Hospital Revenue Bonds, Washington 2/15 at 100.00 BBB 1,027,410
Regional Medical Center, Series 2005A, 5.000%, 2/01/35
------------------------------------------------------------------------------------------------------------------------------------
6,080 Total Arkansas 6,358,667
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 14.9% (10.0% OF TOTAL INVESTMENTS)
3,500 Alameda Corridor Transportation Authority, California, 10/17 at 100.00 AAA 2,840,285
Subordinate Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/25 -
AMBAC Insured
11,000 Anaheim Public Finance Authority, California, Subordinate Lease No Opt. Call AAA 6,131,400
Revenue Bonds, Public Improvement Project, Series 1997C, 0.000%,
9/01/20 - FSA Insured
California Department of Water Resources, Power Supply Revenue
Bonds, Series 2002A:
4,000 6.000%, 5/01/15 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 4,532,640
3,175 5.375%, 5/01/22 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 3,500,914
3,365 California Health Facilities Financing Authority, Health Facility 3/13 at 100.00 A 3,459,422
Revenue Bonds, Adventist Health System/West, Series 2003A,
5.000%, 3/01/33
California Health Facilities Financing Authority, Revenue Bonds,
Kaiser Permanante System, Series 2006:
5,000 5.000%, 4/01/37 4/16 at 100.00 A+ 5,217,300
7,000 5.250%, 4/01/39 4/16 at 100.00 A+ 7,465,570
2,380 California Infrastructure Economic Development Bank, Revenue 10/11 at 101.00 A- 2,490,599
Bonds, J. David Gladstone Institutes, Series 2001, 5.250%,
10/01/34
5,300 California, General Obligation Bonds, Series 2004, 5.100%, 2/01/34 2/09 at 100.00 A+ 5,405,629
5,000 California, General Obligation Bonds, Series 2005, 5.000%, 3/01/31 3/16 at 100.00 A+ 5,296,050
6,435 California, General Obligation Refunding Bonds, Series 2002, No Opt. Call AAA 7,608,165
6.000%, 4/01/16 - AMBAC Insured
5,000 Coast Community College District, Orange County, California, 8/18 at 100.00 AAA 3,788,900
General Obligation Bonds, Series 2006C, 0.000%, 8/01/32 - FSA
Insured
2,990 East Bay Municipal Utility District, Alameda and Contra Costa 6/21 at 100.00 AAA 2,991,615
Counties, California, Water System Subordinated Revenue
Refunding Bonds, Series 1996, 4.750%, 6/01/21 - FGIC Insured
22
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 10,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB $ 11,412,900
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1, 6.750%,
6/01/39
8,000 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 A 8,274,960
Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A,
5.000%, 6/01/45
1,000 Mt. Diablo Hospital District, California, Insured Hospital 12/06 at 100.00 AAA 1,020,620
Revenue Bonds, Series 1993A, 5.125%, 12/01/23 - AMBAC
Insured (ETM)
13,450 Ontario Redevelopment Financing Authority, San Bernardino County, No Opt. Call AAA 17,010,887
California, Revenue Refunding Bonds, Redevelopment Project 1,
Series 1995, 7.200%, 8/01/17 - MBIA Insured
14,535 Palmdale Community Redevelopment Agency, California, Residential No Opt. Call AAA 15,300,413
Mortgage Revenue Refunding Bonds, Series 1991A, 7.150%,
2/01/10 (ETM)
2,325 Palmdale Community Redevelopment Agency, California, Restructured No Opt. Call AAA 3,095,110
Single Family Mortgage Revenue Bonds, Series 1986D, 8.000%,
4/01/16 (Alternative Minimum Tax) (ETM)
2,000 San Francisco Airports Commission, California, Revenue Bonds, 5/09 at 101.00 AAA 2,064,620
San Francisco International Airport, Second Series 1999, Issue
23B, 5.125%, 5/01/30 - FGIC Insured
2,000 San Francisco Airports Commission, California, Revenue Refunding 5/11 at 100.00 AAA 2,101,060
Bonds, San Francisco International Airport, Second Series 2001,
Issue 27B, 5.125%, 5/01/26 - FGIC Insured
3,000 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AAA 841,050
California, Toll Road Revenue Refunding Bonds, Series 1997A,
0.000%, 1/15/35 - MBIA Insured
15,745 Walnut Valley Unified School District, Los Angeles County, 8/11 at 103.00 AAA 18,650,424
California, General Obligation Refunding Bonds, Series 1997A,
7.200%, 2/01/16 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
136,200 Total California 140,500,533
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 6.2% (4.1% OF TOTAL INVESTMENTS)
5,240 Adams 12 Five Star Schools, Adams County, Colorado, General 12/15 at 100.00 AAA 5,618,328
Obligation Bonds, Series 2005, 5.000%, 12/15/24 - FSA Insured
3,000 Colorado Educational and Cultural Facilities Authority, Charter 8/14 at 100.00 AAA 3,216,480
School Revenue Bonds, Peak-to-Peak Charter School, Series 2004,
5.250%, 8/15/34 - XLCA Insured
5,860 Colorado Health Facilities Authority, Revenue Refunding Bonds, 9/11 at 100.00 AA(4) 6,278,404
Catholic Health Initiatives, Series 2001, 5.250%, 9/01/21
(Pre-refunded 9/01/11)
7,575 Denver City and County, Colorado, Airport System Revenue Bonds, 11/07 at 101.00 AAA 7,760,890
Series 1997E, 5.250%, 11/15/23 - MBIA Insured
20,000 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA 21,642,799
Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%,
12/01/33 (Pre-refunded 12/01/13) - XLCA Insured
10,615 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AAA 5,631,045
Series 1997B, 0.000%, 9/01/21 - MBIA Insured
10,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AAA 3,183,600
Series 2000B, 0.000%, 9/01/32 - MBIA Insured
755 Jefferson County School District R1, Colorado, General Obligation 12/14 at 100.00 AAA 808,235
Bonds, Series 2004, 5.000%, 12/15/22 - FSA Insured
4,125 Municipal Subdistrict Northern Colorado Water District, Revenue 12/07 at 101.00 AAA 4,234,478
Bonds, Series 1997G, 5.250%, 12/01/15 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
67,170 Total Colorado 58,374,259
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 2.0% (1.3% OF TOTAL INVESTMENTS)
6,110 District of Columbia Tobacco Settlement Corporation, Tobacco 5/11 at 101.00 BBB 6,590,429
Settlement Asset-Backed Bonds, Series 2001, 6.250%, 5/15/24
5,590 District of Columbia, General Obligation Bonds, Series 1999B, 6/09 at 101.00 AAA 5,890,630
5.500%, 6/01/13 - FSA Insured
6,000 Washington Convention Center Authority, District of Columbia, 10/08 at 101.00 AAA 6,224,040
Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 5.250%,
10/01/10 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
17,700 Total District of Columbia 18,705,099
------------------------------------------------------------------------------------------------------------------------------------
23
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 6.3% (4.2% OF TOTAL INVESTMENTS)
Broward County Housing Finance Authority, Florida, Multifamily
Housing Revenue Bonds, Venice Homes Apartments, Series 2001A:
$ 1,545 5.700%, 1/01/32 - FSA Insured (Alternative Minimum Tax) 7/11 at 100.00 AAA $ 1,583,532
1,805 5.800%, 1/01/36 - FSA Insured (Alternative Minimum Tax) 7/11 at 100.00 AAA 1,854,547
5,300 Escambia County Health Facilities Authority, Florida, Revenue No Opt. Call AA 5,823,375
Bonds, Ascension Health Credit Group, Series 2003A, 5.250%,
11/15/14
2,360 Florida Housing Finance Corporation, Homeowner Mortgage Revenue 1/10 at 100.00 AAA 2,441,137
Bonds, Series 2000-11, 5.850%, 1/01/22 - FSA Insured
(Alternative Minimum Tax)
10,050 Florida State Board of Education, Full Faith and Credit Public 6/10 at 101.00 AAA 10,835,207
Education Capital Outlay Refunding Bonds, Series 1999D, 5.750%,
6/01/22
7,000 Hillsborough County Aviation Authority, Florida, Revenue Bonds, 10/13 at 100.00 AAA 7,543,620
Tampa International Airport, Series 2003A, 5.250%, 10/01/17 -
MBIA Insured (Alternative Minimum Tax)
10,000 JEA, Florida, Electric System Revenue Bonds, Series 2006-3A, 4/15 at 100.00 AAA 10,512,700
5.000%, 10/01/41 - FSA Insured
10,750 Martin County Industrial Development Authority, Florida, 12/06 at 100.00 BB+ 10,789,560
Industrial Development Revenue Bonds, Indiantown Cogeneration
LP, Series 1994A, 7.875%, 12/15/25 (Alternative Minimum Tax)
2,570 Miami-Dade County Housing Finance Authority, Florida, Multifamily 6/11 at 100.00 AAA 2,680,484
Mortgage Revenue Bonds, Country Club Villas II Project, Series
2001-1A, 5.850%, 1/01/37 - FSA Insured (Alternative Minimum Tax)
3,500 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/15 at 100.00 AAA 3,648,925
International Airport, Series 2005A, 5.000%, 10/01/37 - XLCA
Insured (Alternative Minimum Tax)
1,700 Miami-Dade County, Florida, Beacon Tradeport Community 5/12 at 102.00 AA 1,851,232
Development District, Special Assessment Bonds, Commercial
Project, Series 2002A, 5.625%, 5/01/32 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
56,580 Total Florida 59,564,319
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 3.1% (2.2% OF TOTAL INVESTMENTS)
4,920 Atlanta, Georgia, Airport General Revenue Refunding Bonds, 1/10 at 101.00 AAA 5,276,356
Series 2000A, 5.600%, 1/01/30 (Pre-refunded 1/01/10) - FGIC
Insured
5,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, No Opt. Call AAA 5,814,150
Series 1999A, 5.500%, 11/01/22 - FGIC Insured
2,000 George L. Smith II World Congress Center Authority, Atlanta, 7/10 at 101.00 AAA 2,118,900
Georgia, Revenue Refunding Bonds, Domed Stadium Project, Series
2000, 5.500%, 7/01/20 - MBIA Insured (Alternative Minimum Tax)
15,000 Private Colleges and Universities Authority, Georgia, Revenue 11/09 at 101.00 AA(4) 15,997,950
Bonds, Emory University, Series 1999A, 5.500%, 11/01/25
(Pre-refunded 11/01/09)
------------------------------------------------------------------------------------------------------------------------------------
26,920 Total Georgia 29,207,356
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.1% (0.1% OF TOTAL INVESTMENTS)
665 Idaho Housing and Finance Association, Single Family Mortgage 1/10 at 100.00 A1 679,750
Bonds, Series 2000D, 6.200%, 7/01/14 (Alternative Minimum Tax)
395 Idaho Housing and Finance Association, Single Family Mortgage 7/10 at 100.00 Aa2 407,024
Bonds, Series 2000G-2, 5.950%, 7/01/25 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,060 Total Idaho 1,086,774
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 21.9% (14.7% OF TOTAL INVESTMENTS)
10,000 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 5,790,500
Obligation Bonds, Dedicated Tax Revenues, Series 1998B-1,
0.000%, 12/01/19 - FGIC Insured
10,000 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 5,507,900
Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 0.000%,
12/01/20 - FGIC Insured
Chicago, Illinois, General Obligation Bonds, City Colleges,
Series 1999:
32,170 0.000%, 1/01/21 - FGIC Insured No Opt. Call AAA 17,656,505
32,670 0.000%, 1/01/22 - FGIC Insured No Opt. Call AAA 17,060,274
3,000 Chicago, Illinois, General Obligation Bonds, Library Projects, 1/08 at 102.00 AAA 3,133,440
Series 1997, 5.750%, 1/01/17 (Pre-refunded 1/01/08) - FGIC
Insured
9,145 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1996A, 1/07 at 101.00 AAA 9,265,257
5.500%, 1/01/29 - MBIA Insured
24
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 1,665 Chicago, Illinois, Third Lien General Airport Revenue Bonds, 1/16 at 100.00 AAA $ 1,758,240
O'Hare International Airport, Series 2005A, 5.000%, 1/01/33 -
FGIC Insured
DuPage County Forest Preserve District, Illinois, General
Obligation Bonds, Series 2000:
8,000 0.000%, 11/01/18 No Opt. Call AAA 4,869,600
15,285 0.000%, 11/01/19 No Opt. Call AAA 8,881,655
4,000 Illinois Health Facilities Authority, FHA-Insured Mortgage 8/13 at 100.00 AAA 4,178,920
Revenue Refunding Bonds, Sinai Health System, Series 2003,
5.150%, 2/15/37
1,090 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/12 at 100.00 A- 1,173,494
Hospital, Series 2002A, 5.750%, 7/01/29
3,000 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/13 at 100.00 A- 3,310,050
Hospital, Series 2003, 6.000%, 7/01/33
4,580 Illinois Health Facilities Authority, Revenue Bonds, Midwest Care 8/10 at 102.00 Aaa 4,970,353
Center IX Inc., Series 2000, 6.250%, 8/20/35
2,645 Illinois Health Facilities Authority, Revenue Bonds, Silver Cross 8/09 at 101.00 A 2,737,866
Hospital and Medical Centers, Series 1999, 5.250%, 8/15/15
(Mandatory put 4/01/08)
7,250 Kane, Kendall, LaSalle, and Will Counties, Illinois, Community 12/13 at 57.71 AAA 3,037,025
College District 516, General Obligation Bonds, Series 2005E,
0.000%, 12/15/24 - FGIC Insured
5,000 Kane, McHenry, Cook and DeKalb Counties Community Unit School 12/11 at 100.00 AAA 5,438,750
District 300, Carpentersville, Illinois, General Obligation
Bonds, Series 2000, 5.500%, 12/01/19 (Pre-refunded 12/01/11) -
MBIA Insured
3,700 Libertyville, Illinois, Affordable Housing Revenue Bonds, Liberty 11/09 at 100.00 A3 3,819,140
Towers Project, Series 1999A, 7.000%, 11/01/29
(Alternative Minimum Tax)
6,000 McHenry County Conservation District, Illinois, General 2/11 at 100.00 AAA 6,487,980
Obligation Bonds, Series 2001A, 5.625%, 2/01/21
(Pre-refunded 2/01/11) - FGIC Insured
5,000 Metropolitan Pier and Exposition Authority, Illinois, Revenue 6/12 at 101.00 AAA 5,365,550
Bonds, McCormick Place Expansion Project, Series 2002A, 5.250%,
6/15/42 - MBIA Insured
10,650 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 14,322,972
Bonds, McCormick Place Hospitality Facility, Series 1996A,
7.000%, 7/01/26 (ETM)
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Refunding Bonds, McCormick Place Expansion Project, Series 1996A:
9,400 0.000%, 12/15/18 - MBIA Insured No Opt. Call AAA 5,699,690
16,570 0.000%, 12/15/20 - MBIA Insured No Opt. Call AAA 9,149,457
23,550 0.000%, 12/15/22 - MBIA Insured No Opt. Call AAA 11,804,438
13,000 0.000%, 12/15/24 - MBIA Insured No Opt. Call AAA 5,938,920
5,100 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 5,989,287
Refunding Bonds, McCormick Place Expansion Project,
Series 1998A, 5.500%, 12/15/23 - FGIC Insured
5,180 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 6,189,945
Refunding Bonds, McCormick Place Expansion Project,
Series 1998A, 5.500%, 12/15/23 - FGIC Insured (ETM)
17,865 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 21,559,660
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1999, 5.750%, 6/01/23 - FSA Insured
6,090 Sherman, Illinois, GNMA Mortgage Revenue Refunding Bonds, Villa 10/09 at 102.00 AAA 6,573,790
Vianney, Series 1999A, 6.450%, 10/01/29
10,000 Will County Community High School District 210 Lincoln-Way, No Opt. Call Aaa 4,955,700
Illinois, General Obligation Bonds, Series 2006, 0.000%,
1/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
281,605 Total Illinois 206,626,358
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 6.6% (4.4% OF TOTAL INVESTMENTS)
2,465 Danville Multi-School Building Corporation, Indiana, First 7/11 at 100.00 AAA 2,626,827
Mortgage Refunding Bonds, Series 2001, 5.250%, 7/15/18 - AMBAC
Insured
14,000 Indiana Health Facility Financing Authority, Hospital Revenue 8/10 at 101.50 AAA 15,103,900
Bonds, Clarian Health Obligated Group, Series 2000A, 5.500%,
2/15/30 (Pre-refunded 8/15/10) - MBIA Insured
2,500 Indiana Health Facility Financing Authority, Hospital Revenue No Opt. Call AAA 2,915,750
Refunding Bonds, Columbus Regional Hospital, Series 1993,
7.000%, 8/15/15 - FSA Insured
25
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDIANA (continued)
Indiana Health Facility Financing Authority, Revenue Bonds,
Ancilla Systems Inc. Obligated Group, Series 1997:
$ 15,380 5.250%, 7/01/17 - MBIA Insured (ETM) 7/07 at 101.00 AAA $ 15,694,521
4,320 5.250%, 7/01/22 - MBIA Insured (ETM) 7/07 at 101.00 AAA 4,406,486
2,250 5.250%, 7/01/22 - MBIA Insured (ETM) 7/07 at 101.00 AAA 2,295,045
2,000 Indiana Health Facility Financing Authority, Revenue Bonds, 5/15 at 100.00 AAA 2,100,980
Community Hospitals of Indiana, Series 2005A, 5.000%, 5/01/35 -
AMBAC Insured
6,715 Indiana Transportation Finance Authority, Highway Revenue Bonds, 12/10 at 100.00 AA 7,124,346
Series 2000, 5.375%, 12/01/25
1,285 Indiana Transportation Finance Authority, Highway Revenue Bonds, 12/10 at 100.00 AA(4) 1,373,626
Series 2000, 5.375%, 12/01/25 (Pre-refunded 12/01/10)
3,105 Indiana University, Student Fee Revenue Bonds, Series 2003O, 8/13 at 100.00 AAA 3,371,626
5.250%, 8/01/20 - FGIC Insured
1,000 Marion County Convention and Recreational Facilities Authority, 6/11 at 100.00 AAA 1,052,800
Indiana, Excise Taxes Lease Rental Revenue Refunding Senior
Bonds, Series 2001A, 5.000%, 6/01/21 - MBIA Insured
2,395 Shelbyville Central Renovation School Building Corporation, 7/15 at 100.00 AAA 2,395,719
Indiana, First Mortgage Bonds, Series 2005, 4.375%, 7/15/26 -
MBIA Insured
1,800 Sunman Dearborn High School Building Corporation, Indiana, First 1/15 at 100.00 AAA 1,907,298
Mortgage Bonds, Series 2005, 5.000%, 7/15/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
59,215 Total Indiana 62,368,924
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.7% (0.5% OF TOTAL INVESTMENTS)
1,500 Iowa Finance Authority, Health Facility Revenue Bonds, Care 7/16 at 100.00 BBB- 1,588,080
Initiatives Project, Series 2006A, 5.500%, 7/01/21
5,000 Iowa Tobacco Settlement Authority, Tobacco Settlement Asset-Backed 6/11 at 101.00 AAA 5,449,150
Revenue Bonds, Series 2001B, 5.600%, 6/01/35 (Pre-refunded
6/01/11)
------------------------------------------------------------------------------------------------------------------------------------
6,500 Total Iowa 7,037,230
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 1.3% (0.9% OF TOTAL INVESTMENTS)
3,790 Kansas Department of Transportation, Highway Revenue Bonds, 3/14 at 100.00 AAA 4,029,869
Series 2004A, 5.000%, 3/01/23
5,790 Sedgwick County Unified School District 259, Wichita, Kansas, 9/10 at 100.00 AA 5,572,817
General Obligation Bonds, Series 2000, 3.500%, 9/01/17
3,200 Wyandotte County Unified School District 500, Kansas, General 9/11 at 100.00 AAA 3,176,864
Obligation Bonds, Series 2001, 4.000%, 9/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
12,780 Total Kansas 12,779,550
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.4% (0.3% OF TOTAL INVESTMENTS)
3,700 Louisville and Jefferson County Metropolitan Sewer District, 5/07 at 101.00 AAA 3,789,799
Kentucky, Sewer and Drainage System Revenue Bonds, Series
1997A, 6.250%, 5/15/26 (Pre-refunded 5/15/07) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 3.0% (2.0% OF TOTAL INVESTMENTS)
1,020 East Baton Rouge Mortgage Finance Authority, Louisiana, GNMA/FNMA 10/07 at 102.00 Aaa 1,041,053
Mortgage-Backed Securities Program Single Family Mortgage
Revenue Refunding Bonds, Series 1997B-1, 5.750%, 10/01/26
4,000 Lafayette City and Parish, Louisiana, Utilities Revenue Bonds, 11/14 at 100.00 AAA 4,365,200
Series 2004, 5.250%, 11/01/25 - MBIA Insured
4,650 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AAA 4,968,525
General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured
Tobacco Settlement Financing Corporation, Louisiana, Tobacco
Settlement Asset-Backed Bonds, Series 2001B:
10,000 5.500%, 5/15/30 5/11 at 101.00 BBB 10,502,600
6,680 5.875%, 5/15/39 5/11 at 101.00 BBB 7,114,801
------------------------------------------------------------------------------------------------------------------------------------
26,350 Total Louisiana 27,992,179
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 0.6% (0.4% OF TOTAL INVESTMENTS)
5,680 Portland, Maine, Airport Revenue Bonds, Series 2003A, 5.000%, 7/13 at 100.00 AAA 5,939,860
7/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
26
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.7% (1.1% OF TOTAL INVESTMENTS)
$ 7,720 Maryland Transportation Authority, Airport Parking Revenue Bonds, 3/12 at 101.00 AAA $ 8,145,990
Baltimore-Washington International Airport Passenger Facility,
Series 2002B, 5.125%, 3/01/20 - AMBAC Insured (Alternative
Minimum Tax)
7,090 Takoma Park, Maryland, Hospital Facilities Revenue Refunding and No Opt. Call AAA 7,801,482
Improvement Bonds, Washington Adventist Hospital, Series 1995,
6.500%, 9/01/12 - FSA Insured (ETM)
------------------------------------------------------------------------------------------------------------------------------------
14,810 Total Maryland 15,947,472
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 5.7% (3.8% OF TOTAL INVESTMENTS)
Massachusetts Development Finance Authority, Revenue Bonds, 100
Cambridge Street Redevelopment, M/SRBC Project, Series 2002A:
4,000 5.125%, 8/01/28 - MBIA Insured 2/12 at 100.00 AAA 4,207,080
5,625 5.125%, 2/01/34 - MBIA Insured 2/12 at 100.00 AAA 5,916,206
1,190 Massachusetts Educational Finance Authority, Student Loan Revenue 12/09 at 101.00 AAA 1,199,794
Refunding Bonds, Series 2000G, 5.700%, 12/01/11 - MBIA Insured
(Alternative Minimum Tax)
8,730 Massachusetts Health and Educational Facilities Authority, Revenue 10/15 at 100.00 AAA 9,370,258
Bonds, Berkshire Health System, Series 2005F, 5.000%, 10/01/19 -
AGC Insured
1,530 Massachusetts Health and Educational Facilities Authority, Revenue 7/08 at 101.00 Aaa 1,549,676
Bonds, Southcoast Health System Obligated Group, Series 1998A,
4.750%, 7/01/27 - MBIA Insured
5,745 Massachusetts Industrial Finance Agency, Resource Recovery Revenue 12/08 at 102.00 BBB 5,937,400
Refunding Bonds, Ogden Haverhill Project, Series 1998A, 5.600%,
12/01/19 (Alternative Minimum Tax)
10,150 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102.00 AAA 10,369,951
Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA
Insured
890 Massachusetts, General Obligation Bonds, Consolidated Loan, Series 11/12 at 100.00 AA(4) 965,365
2002C, 5.250%, 11/01/30 (Pre-refunded 11/01/12)
Massachusetts, General Obligation Bonds, Consolidated Loan,
Series 2002E:
1,255 5.250%, 1/01/22 (Pre-refunded 1/01/13) - FGIC Insured 1/13 at 100.00 AAA 1,366,005
3,745 5.250%, 1/01/22 (Pre-refunded 1/01/13) - FGIC Insured 1/13 at 100.00 AAA 4,076,245
8,500 Route 3 North Transportation Improvements Association, 6/10 at 100.00 AAA 9,024,620
Massachusetts, Lease Revenue Bonds, Series 2000, 5.375%, 6/15/33
(Pre-refunded 6/15/10) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
51,360 Total Massachusetts 53,982,600
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 6.7% (4.5% OF TOTAL INVESTMENTS)
17,000 Birmingham City School District, Oakland County, Michigan, School 11/07 at 100.00 AAA 17,113,900
Building and Site Bonds, Series 1998, 4.750%, 11/01/24 - FSA
Insured
5,000 Detroit, Michigan, Second Lien Sewerage Disposal System Revenue 7/15 at 100.00 AAA 5,271,050
Bonds, Series 2005A, 5.000%, 7/01/35 - MBIA Insured
3,000 Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, 7/07 at 101.00 AAA 3,058,470
Series 1997A, 5.000%, 7/01/21 (Pre-refunded 7/01/07) - MBIA
Insured
4,030 Hancock Hospital Finance Authority, Michigan, FHA-Insured Mortgage 8/08 at 100.00 AAA 4,142,115
Hospital Revenue Bonds, Portage Health System Inc., Series 1998,
5.450%, 8/01/47 - MBIA Insured
1,500 Michigan State Building Authority, Revenue Bonds, Facilities 10/11 at 100.00 AA- 1,574,355
Program, Series 2001I, 5.000%, 10/15/24
5,000 Michigan State Building Authority, Revenue Refunding Bonds, 10/13 at 100.00 AAA 5,249,800
Facilities Program, Series 2003II, 5.000%, 10/15/29 - MBIA
Insured
7,115 Michigan State Hospital Finance Authority, Hospital Revenue 3/13 at 100.00 A1(4) 7,843,647
Refunding Bonds, Henry Ford Health System, Series 2003A, 5.500%,
3/01/16 (Pre-refunded 3/01/13)
5,000 Michigan State Hospital Finance Authority, Hospital Revenue No Opt. Call AAA 5,349,850
Refunding Bonds, Sisters of Mercy Health Corporation, Series
1993P, 5.375%, 8/15/14 - MBIA Insured (ETM)
3,000 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 3,165,660
Pollution Control Revenue Refunding Bonds, Detroit Edison
Company, Series 1999A, 5.550%, 9/01/29 - MBIA Insured
(Alternative Minimum Tax)
27
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN (continued)
$ 10,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA $ 10,383,300
Metropolitan Wayne County Airport, Series 1998A, 5.375%,
12/01/16 - MBIA Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
60,645 Total Michigan 63,152,147
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 3.0% (2.0% OF TOTAL INVESTMENTS)
3,000 Minneapolis-St. Paul Metropolitan Airports Commission, Minnesota, 1/11 at 100.00 AAA 3,154,200
Subordinate Airport Revenue Bonds, Series 2001C, 5.250%,
1/01/26 - FGIC Insured
20,165 St. Paul Housing and Redevelopment Authority, Minnesota, Sales Tax 11/15 at 103.00 AAA 25,063,077
Revenue Refunding Bonds, Civic Center Project, Series 1996,
7.100%, 11/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
23,165 Total Minnesota 28,217,277
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.3% (0.9% OF TOTAL INVESTMENTS)
9,750 Mississippi Business Finance Corporation, Pollution Control 4/07 at 100.00 BBB- 9,780,323
Revenue Refunding Bonds, System Energy Resources Inc. Project,
Series 1998, 5.875%, 4/01/22
2,475 Mississippi Hospital Equipment and Facilities Authority, Revenue 9/14 at 100.00 N/R 2,537,717
Bonds, Baptist Memorial Healthcare, Series 2004B-1, 5.000%,
9/01/24
------------------------------------------------------------------------------------------------------------------------------------
12,225 Total Mississippi 12,318,040
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.6% (1.1% OF TOTAL INVESTMENTS)
6,350 Kansas City, Missouri, Airport Revenue Bonds, General Improvement 9/12 at 100.00 AAA 6,825,615
Projects, Series 2003B, 5.250%, 9/01/17 - FGIC Insured
1,845 Missouri Health and Educational Facilities Authority, Revenue 5/13 at 100.00 AA 1,979,906
Bonds, BJC Health System, Series 2003, 5.250%, 5/15/18
3,815 Missouri Health and Educational Facilities Authority, Revenue 6/11 at 101.00 AAA 4,111,883
Bonds, SSM Healthcare System, Series 2001A, 5.250%, 6/01/28
(Pre-refunded 6/01/11) - AMBAC Insured
2,000 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 2,104,300
Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink
Cross County Extension Project, Series 2002B, 5.000%,
10/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
14,010 Total Missouri 15,021,704
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.7% (0.4% OF TOTAL INVESTMENTS)
610 Montana Board of Housing, Single Family Mortgage Bonds, Series 6/07 at 101.50 AA+ 622,267
1997A-1, 6.150%, 6/01/30 (Alternative Minimum Tax)
740 Montana Board of Housing, Single Family Mortgage Bonds, Series 12/09 at 100.00 AA+ 756,532
2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax)
4,795 Montana Higher Education Student Assistance Corporation, Student 12/08 at 101.00 A2 4,916,505
Loan Revenue Bonds, Subordinate Series 1998B, 5.500%, 12/01/31
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
6,145 Total Montana 6,295,304
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.1% (0.1% OF TOTAL INVESTMENTS)
1,430 Nebraska Investment Finance Authority, Single Family Housing 9/10 at 100.00 AAA 1,442,641
Revenue Bonds, Series 2000E, 5.850%, 9/01/20
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 2.4% (1.6% OF TOTAL INVESTMENTS)
10,900 Clark County School District, Nevada, General Obligation Bonds, 6/12 at 100.00 AAA 11,955,011
Series 2002C, 5.500%, 6/15/19 (Pre-refunded 6/15/12) - MBIA
Insured
5,000 Clark County, Nevada, General Obligation Bank Bonds, Southern 6/11 at 100.00 AAA 5,368,050
Nevada Water Authority Loan, Series 2001, 5.300%, 6/01/19
(Pre-refunded 6/01/11) - FGIC Insured
4,980 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 5,190,505
Revenue Bonds, Las Vegas Monorail Project, First Tier, Series
2000, 5.375%, 1/01/40 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
20,880 Total Nevada 22,513,566
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 1.5% (1.0% OF TOTAL INVESTMENTS)
3,265 New Hampshire Health and Education Facilities Authority, Revenue 1/15 at 100.00 A 3,374,214
Bonds, Southern New Hampshire University, Series 2005, 5.000%,
1/01/30 - ACA Insured
28
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE (continued)
New Hampshire Housing Finance Authority, FHLMC Multifamily
Housing Remarketed Revenue Bonds, Countryside LP, Series 1994:
$ 3,725 6.000%, 7/01/18 (Alternative Minimum Tax) 7/10 at 101.00 Aaa $ 3,919,408
6,945 6.100%, 7/01/24 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 7,290,861
------------------------------------------------------------------------------------------------------------------------------------
13,935 Total New Hampshire 14,584,483
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 8.9% (6.0% OF TOTAL INVESTMENTS)
3,000 New Jersey Economic Development Authority, Transportation Sublease 5/09 at 100.00 AAA 3,122,820
Revenue Bonds, Light Rail Transit System, Series 1999A, 5.250%,
5/01/17 (Pre-refunded 5/01/09) - FSA Insured
2,490 New Jersey Higher Education Assistance Authority, Student Loan 6/10 at 101.00 AAA 2,541,120
Revenue Bonds, Series 2000A, 6.000%, 6/01/13 - MBIA Insured
(Alternative Minimum Tax)
8,750 New Jersey Transportation Trust Fund Authority, Transportation 6/07 at 102.00 AAA 9,014,600
System Bonds, Series 1996B, 5.250%, 6/15/16
(Pre-refunded 6/15/07)
4,500 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 5,197,095
System Bonds, Series 2001C, 5.500%, 12/15/18 - FSA Insured
9,250 New Jersey Transportation Trust Fund Authority, Transportation 6/13 at 100.00 AAA 10,275,178
System Bonds, Series 2003C, 5.500%, 6/15/23
(Pre-refunded 6/15/13)
New Jersey Transportation Trust Fund Authority, Transportation
System Bonds, Series 2006C:
35,000 0.000%, 12/15/29 - FSA Insured No Opt. Call AAA 13,028,050
10,000 0.000%, 12/15/30 - FGIC Insured No Opt. Call AAA 3,566,600
10,000 New Jersey Turnpike Authority, Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 10,697,300
5.000%, 1/01/20 - FSA Insured
13,470 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 BBB 14,316,455
Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32
4,450 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/13 at 100.00 BBB 5,078,741
Settlement Asset-Backed Bonds, Series 2003, 6.750%, 6/01/39
West Deptford Township, Gloucester County, New Jersey, General
Obligation Bonds, Series 2000:
3,150 5.500%, 9/01/21 (Pre-refunded 9/01/10) - FGIC Insured 9/10 at 100.00 Aaa 3,369,933
3,335 5.500%, 9/01/22 (Pre-refunded 9/01/10) - FGIC Insured 9/10 at 100.00 Aaa 3,567,850
------------------------------------------------------------------------------------------------------------------------------------
107,395 Total New Jersey 83,775,742
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 9.9% (6.6% OF TOTAL INVESTMENTS)
5,500 Dormitory Authority of the State of New York, FHA-Insured Mortgage 2/14 at 100.00 AAA 5,788,090
Revenue Bonds, Kaleida Health, Series 2004, 5.050%, 2/15/25
35 Dormitory Authority of the State of New York, Improvement Revenue 2/08 at 100.00 AAA 35,747
Bonds, Mental Health Services Facilities, Series 1996B, 5.375%,
2/15/26 - MBIA Insured
2,070 Dormitory Authority of the State of New York, Insured Revenue 7/08 at 101.00 AAA 2,155,367
Bonds, 853 Schools Program, Gateway-Longview Inc., Series 1998A,
5.500%, 7/01/18 - AMBAC Insured
2,250 Dormitory Authority of the State of New York, Lease Revenue Bonds, 7/09 at 101.00 AAA 2,386,080
State University Dormitory Facilities, Series 1999C, 5.500%,
7/01/29 (Pre-refunded 7/01/09) - MBIA Insured
Dormitory Authority of the State of New York, Revenue Bonds,
Marymount Manhattan College, Series 1999:
1,580 6.375%, 7/01/13 - RAAI Insured 7/09 at 101.00 AA 1,692,701
9,235 6.125%, 7/01/21 - RAAI Insured 7/09 at 101.00 AA 9,858,824
1,500 Dormitory Authority of the State of New York, Revenue Bonds, 8/07 at 101.00 AAA 1,535,565
St. Barnabas Hospital, Series 1997, 5.450%, 8/01/35 - AMBAC
Insured
3,000 Dormitory Authority of the State of New York, Third General 1/08 at 102.00 AAA 3,122,100
Resolution Consolidated Revenue Bonds, City University System,
Series 1997-1, 5.375%, 7/01/24 (Pre-refunded 1/01/08) -
FSA Insured
17,000 Dormitory Authority of the State of New York, Third General 7/09 at 101.00 AAA 18,028,160
Resolution Consolidated Revenue Bonds, City University System,
Series 1999-1, 5.500%, 7/01/29 (Pre-refunded 7/01/09) -
FSA Insured
1,500 Hempstead Industrial Development Agency, New York, Resource 12/10 at 100.00 BB+ 1,540,335
Recovery Revenue Refunding Bonds, American Ref-Fuel Company of
Hempstead LP, Series 2001, 5.000%, 12/01/10 (Mandatory
put 6/01/10)
29
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
$ 13,220 Metropolitan Transportation Authority, New York, Dedicated Tax 11/12 at 100.00 AAA $ 14,437,298
Fund Bonds, Series 2002A, 5.500%, 11/15/26 - FSA Insured
1,380 New York City Municipal Water Finance Authority, New York, Water 9/07 at 100.00 AAA 1,395,925
and Sewerage System Revenue Bonds, Fiscal Series 1997A, 5.500%,
6/15/24 - MBIA Insured
10,000 New York City Municipal Water Finance Authority, New York, Water 6/09 at 101.00 AA+(4) 10,656,400
and Sewerage System Revenue Bonds, Fiscal Series 2000A, 5.750%,
6/15/30 (Pre-refunded 6/15/09)
7,810 New York City Transitional Finance Authority, New York, Future Tax 8/09 at 101.00 AAA 8,348,890
Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24
(Pre-refunded 8/15/09)
5 New York City, New York, General Obligation Bonds, Fiscal Series 2/07 at 100.00 AA- 5,058
1987D, 8.500%, 8/01/08
6,300 New York City, New York, General Obligation Bonds, Fiscal Series 5/10 at 101.00 AAA 6,876,954
2000A, 6.250%, 5/15/26 - FSA Insured
3,000 New York State Energy Research and Development Authority, 9/08 at 102.00 AAA 3,170,940
Pollution Control Revenue Bonds, Rochester Gas and Electric
Corporation, Series 1998A, 5.950%, 9/01/33 - MBIA Insured
(Alternative Minimum Tax)
2,320 New York State Tobacco Settlement Financing Corporation, Tobacco 6/10 at 100.00 AA- 2,456,068
Settlement Asset-Backed and State Contingency Contract-Backed
Bonds, Series 2003A-1, 5.500%, 6/01/16
------------------------------------------------------------------------------------------------------------------------------------
87,705 Total New York 93,490,502
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.8% (0.5% OF TOTAL INVESTMENTS)
4,900 Charlotte-Mecklenburg Hospital Authority, North Carolina, 1/15 at 100.00 AA 5,106,535
Healthcare System Revenue Bonds, DBA Carolinas Healthcare
System, Series 2005A, 5.000%, 1/15/45
2,000 North Carolina Municipal Power Agency 1, Catawba Electric Revenue 1/08 at 102.00 AAA 2,066,360
Bonds, Series 1998A, 5.000%, 1/01/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
6,900 Total North Carolina 7,172,895
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 3.6% (2.4% OF TOTAL INVESTMENTS)
7,500 Cleveland, Ohio, Airport System Revenue Bonds, Series 2000A, 1/10 at 101.00 AAA 7,728,150
5.000%, 1/01/31 - FSA Insured
3,650 Montgomery County, Ohio, Revenue Bonds, Catholic Health 5/14 at 100.00 AA 3,811,148
Initiatives, Series 2004A, 5.000%, 5/01/30
2,125 Ohio Housing Finance Agency, GNMA Mortgage-Backed Securities 7/09 at 100.00 Aaa 2,142,170
Program Residential Mortgage Revenue Bonds, Series 1999C,
5.750%, 9/01/30 (Alternative Minimum Tax)
6,400 Ohio Water Development Authority, Solid Waste Disposal Revenue 9/08 at 102.00 N/R 6,493,952
Bonds, Bay Shore Power, Series 1998A, 5.875%, 9/01/20
(Alternative Minimum Tax)
13,300 Ohio Water Development Authority, Solid Waste Disposal Revenue 9/09 at 102.00 N/R 13,791,435
Bonds, Bay Shore Power, Series 1998B, 6.625%, 9/01/20
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
32,975 Total Ohio 33,966,855
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.3% (0.2% OF TOTAL INVESTMENTS)
3,400 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding Bonds, 6/09 at 100.00 B 3,451,544
American Airlines Inc., Series 2000B, 6.000%, 6/01/35
(Mandatory put 12/01/08) (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 1.0% (0.7% OF TOTAL INVESTMENTS)
9,150 Port of St. Helens, Oregon, Pollution Control Revenue Bonds, No Opt. Call Baa1 9,204,992
Portland General Electric Company, Series 1985B, 4.800%, 6/01/10
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.4% (2.3% OF TOTAL INVESTMENTS)
Bethlehem Authority, Northampton and Lehigh Counties,
Pennsylvania, Guaranteed Water Revenue Bonds, Series 1998:
3,125 0.000%, 5/15/22 - FSA Insured No Opt. Call AAA 1,603,625
3,125 0.000%, 5/15/23 - FSA Insured No Opt. Call AAA 1,528,781
3,135 0.000%, 5/15/24 - FSA Insured No Opt. Call AAA 1,463,763
3,155 0.000%, 5/15/26 - FSA Insured No Opt. Call AAA 1,340,244
4,145 0.000%, 11/15/26 - FSA Insured No Opt. Call AAA 1,722,662
2,800 0.000%, 5/15/28 - FSA Insured No Opt. Call AAA 1,087,352
3,000 0.000%, 11/15/28 - FSA Insured No Opt. Call AAA 1,139,730
30
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (continued)
$ 3,415 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- $ 3,596,132
Resource Recovery Revenue Refunding Bonds, Panther Creek
Partners Project, Series 2000, 6.650%, 5/01/10
(Alternative Minimum Tax)
11,000 Delaware County Authority, Pennsylvania, Revenue Bonds, Catholic 11/08 at 102.00 AAA 11,353,870
Health East, Series 1998A, 4.875%, 11/15/18 - AMBAC Insured
Pennsylvania Economic Development Financing Authority, Senior Lien
Resource Recovery Revenue Bonds, Northampton Generating Project,
Series 1994A:
2,100 6.400%, 1/01/09 (Alternative Minimum Tax) 1/07 at 100.00 B+ 2,100,042
4,500 6.500%, 1/01/13 (Alternative Minimum Tax) 1/07 at 100.00 B+ 4,500,135
25 Pennsylvania Economic Development Financing Authority, Senior Lien No Opt. Call N/R(4) 25,124
Resource Recovery Revenue Bonds, Northampton Generating Project,
Series 1994B, 6.750%, 1/01/07 (Alternative Minimum Tax) (ETM)
600 Pennsylvania Economic Development Financing Authority, Subordinate 1/07 at 100.00 N/R 599,982
Resource Recovery Revenue Bonds, Northampton Generating Project,
Series 1994C, 6.875%, 1/01/11 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
44,125 Total Pennsylvania 32,061,442
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.1% (0.1% OF TOTAL INVESTMENTS)
1,250 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/10 at 101.00 AAA 1,362,262
Bonds, Series 2000B, 5.875%, 7/01/21 (Pre-refunded 7/01/10) -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 1.2% (0.8% OF TOTAL INVESTMENTS)
2,000 Kent County Water Authority, Rhode Island, General Revenue Bonds, 7/12 at 100.00 AAA 2,113,540
Series 2002A, 5.000%, 7/15/23 - MBIA Insured
Rhode Island Health and Educational Building Corporation, Revenue
Refunding Bonds, Salve Regina University, Series 2002:
1,260 5.250%, 3/15/17 - RAAI Insured 3/12 at 101.00 AA 1,345,025
1,080 5.250%, 3/15/18 - RAAI Insured 3/12 at 101.00 AA 1,150,826
7,000 Rhode Island Housing and Mortgage Finance Corporation, 10/14 at 100.00 AA+ 7,043,540
Homeownership Opportunity Bond Program, Series 50A, 4.650%,
10/01/34
------------------------------------------------------------------------------------------------------------------------------------
11,340 Total Rhode Island 11,652,931
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 4.2% (2.9% OF TOTAL INVESTMENTS)
2,625 Medical University Hospital Authority, South Carolina, FHA-Insured 8/14 at 100.00 AAA 2,821,665
Mortgage Revenue Bonds, Series 2004A, 5.250%, 2/15/25 - MBIA
Insured
22,855 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AAA 7,815,267
Bonds, Series 2004A-2, 0.000%, 1/01/31 - AMBAC Insured
6,925 South Carolina, General Obligation Bonds, Series 1999A, 4.000%, 10/09 at 101.00 Aaa 7,030,260
10/01/14
21,000 Tobacco Settlement Revenue Management Authority, South Carolina, 5/11 at 101.00 BBB 22,441,439
Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.000%,
5/15/22
------------------------------------------------------------------------------------------------------------------------------------
53,405 Total South Carolina 40,108,631
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.3% (0.9% OF TOTAL INVESTMENTS)
2,860 Johnson City Health and Educational Facilities Board, Tennessee, 7/23 at 100.00 AAA 2,966,135
Hospital Revenue Refunding and Improvement Bonds, Johnson City
Medical Center, Series 1998C, 5.125%, 7/01/25
(Pre-refunded 7/01/23) - MBIA Insured
1,700 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/10 at 101.00 AAA 1,826,242
Revenue Bonds, Series 1999D, 6.000%, 3/01/24 - AMBAC Insured
(Alternative Minimum Tax)
6,000 Metropolitan Government of Nashville-Davidson County Health and 12/17 at 100.00 AAA 7,162,080
Educational Facilities Board, Tennessee, Revenue Refunding and
Improvement Bonds, Meharry Medical College, Series 1996,
6.000%, 12/01/19 - AMBAC Insured
175 Tennessee Housing Development Agency, Homeownership Program Bonds, 7/10 at 101.00 AA 178,988
Series 2000-1, 6.375%, 7/01/25 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
10,735 Total Tennessee 12,133,445
------------------------------------------------------------------------------------------------------------------------------------
31
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 6.5% (4.4% OF TOTAL INVESTMENTS)
$ 3,975 Bell County Health Facilities Development Corporation, Texas, 2/10 at 101.00 AAA $ 4,315,538
Revenue Bonds, Scott and White Memorial Hospital and Scott,
Sherwood and Brindley Foundation, Series 2000A, 6.125%, 8/15/23
(Pre-refunded 2/15/10) - MBIA Insured
5,000 Bexar Metropolitan Water District, Texas, Waterworks System 5/16 at 100.00 AAA 5,284,600
Revenue Bonds, Series 2006, 5.000%, 5/01/35 - MBIA Insured
Central Texas Regional Mobility Authority, Travis and Williamson
Counties, Toll Road Revenue Bonds, Series 2005:
4,000 5.000%, 1/01/35 - FGIC Insured 1/15 at 100.00 AAA 4,192,280
3,000 5.000%, 1/01/45 - FGIC Insured 1/15 at 100.00 AAA 3,125,340
1,000 Fort Worth, Texas, Water and Sewerage Revenue Bonds, Series 1998, 2/08 at 100.00 AA(4) 1,021,620
5.250%, 2/15/15 (Pre-refunded 2/15/08)
1,000 Harlingen Independent School District, Cameron County, Texas, 8/09 at 100.00 AAA 1,055,230
Unlimited Tax School Building Bonds, Series 1999, 5.650%,
8/15/29 (Pre-refunded 8/15/09)
1,625 Harris County Health Facilities Development Corporation, Texas, 7/09 at 101.00 AAA 1,710,491
Revenue Bonds, Christus Health, Series 1999A, 5.375%, 7/01/24
(Pre-refunded 7/01/09) - MBIA Insured
4,000 Houston Community College, Texas, Limited Tax General Obligation 2/13 at 100.00 AAA 4,185,120
Bonds, Series 2003, 5.000%, 2/15/27 - AMBAC Insured
3,885 Houston Independent School District, Public Facility Corporation, No Opt. Call AAA 2,260,953
Harris County, Texas, Lease Revenue Bonds, Cesar E. Chavez High
School, Series 1998A, 0.000%, 9/15/19 - AMBAC Insured
33,855 Leander Independent School District, Williamson and Travis 8/14 at 23.67 AAA 5,541,725
Counties, Texas, General Obligation Bonds, Series 2006, 0.000%,
8/15/40
Leander Independent School District, Williamson and Travis
Counties, Texas, Unlimited Tax School Building and Refunding
Bonds, Series 1998:
4,930 0.000%, 8/15/20 2/07 at 47.76 AAA 2,319,614
3,705 0.000%, 8/15/22 2/07 at 42.48 AAA 1,550,431
285 Lubbock Housing Finance Corporation, Texas, GNMA Mortgage-Backed 6/07 at 102.00 AAA 285,527
Securities Program Single Family Mortgage Revenue Refunding
Bonds, Series 1997A, 6.125%, 12/01/17
3,480 Pearland, Texas, General Obligation Bonds, Series 2002, 5.000%, 3/12 at 100.00 AAA 3,619,200
3/01/27 - FGIC Insured
6,835 San Antonio, Texas, Electric and Gas System Revenue Refunding 2/09 at 100.00 Aa1 6,883,323
Bonds, New Series 1998A, 4.500%, 2/01/21
6,000 Spring Branch Independent School District, Harris County, Texas, 2/11 at 100.00 AAA 6,224,940
Limited Tax Schoolhouse and Refunding Bonds, Series 2001,
5.125%, 2/01/26
4,000 Tarrant Regional Water District, Texas, Water Revenue Refunding 3/13 at 100.00 AAA 4,228,520
and Improvement Bonds, Series 1999, 5.000%, 3/01/22 - FSA
Insured
1,740 Texas, General Obligation Bonds, Water Financial Assistance, State 8/09 at 100.00 AAA 1,820,144
Participation Program, Series 1999C, 5.500%, 8/01/29 - MBIA
Insured
1,690 Webb County, Laredo, Texas, Combination Tax and Sewer System, 2/08 at 100.00 AAA 1,700,715
Revenue Certificates of Obligation, Series 1998A, 4.500%,
2/15/18 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
94,005 Total Texas 61,325,311
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 4.3% (2.9% OF TOTAL INVESTMENTS)
3,315 Intermountain Power Agency, Utah, Power Supply Revenue Refunding 7/07 at 102.00 AAA 3,428,207
Bonds, Series 1997B, 5.750%, 7/01/19 (Pre-refunded 7/01/07) -
MBIA Insured
6,685 Intermountain Power Agency, Utah, Power Supply Revenue Refunding 7/07 at 102.00 AAA 6,905,605
Bonds, Series 1997B, 5.750%, 7/01/19 - MBIA Insured
Utah County, Utah, Hospital Revenue Bonds, IHC Health
Services Inc., Series 1997:
12,885 5.250%, 8/15/21 - MBIA Insured (ETM) 8/07 at 101.00 AAA 13,176,459
3,900 5.250%, 8/15/26 - MBIA Insured (ETM) 8/07 at 101.00 AAA 3,988,218
3,455 Utah Housing Corporation, Single Family Mortgage Bonds, Series 1/12 at 100.00 AA- 3,590,954
2002A-1, 5.300%, 7/01/18 (Alternative Minimum Tax)
20 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 1/10 at 100.00 AA 20,425
2000B, 6.250%, 7/01/22 (Alternative Minimum Tax)
32
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTAH (continued)
$ 1,650 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/10 at 100.00 AA- $ 1,664,157
2000D-1, 6.050%, 7/01/14 (Alternative Minimum Tax)
665 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/10 at 100.00 AA 678,500
2000E-1, Class II, 6.150%, 1/01/27 (Alternative Minimum Tax)
1,995 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/10 at 100.00 Aa1 2,019,219
2000E-1, Class III, 6.000%, 1/01/15 (Alternative Minimum Tax)
940 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 7/11 at 100.00 AA 968,980
2001A-2, 5.650%, 7/01/27 (Alternative Minimum Tax)
740 Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 1/11 at 100.00 Aa2 757,013
2001B-1, 5.750%, 7/01/19 (Alternative Minimum Tax)
3,000 Utah Water Finance Agency, Revenue Bonds, Pooled Loan Financing 10/12 at 100.00 Aaa 3,208,770
Program, Series 2002C, 5.250%, 10/01/28 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
39,250 Total Utah 40,406,507
------------------------------------------------------------------------------------------------------------------------------------
VIRGIN ISLANDS - 0.8% (0.5% OF TOTAL INVESTMENTS)
4,700 Virgin Islands Public Finance Authority, Gross Receipts Taxes Loan 10/14 at 100.00 AA 4,945,998
Note, Series 2003, 5.000%, 10/01/33 - RAAI Insured
2,500 Virgin Islands Public Finance Authority, Revenue Bonds, Refinery 1/14 at 100.00 BBB 2,768,100
Project - Hovensa LLC, Series 2003, 6.125%, 7/01/22
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,200 Total Virgin Islands 7,714,098
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 5.0% (3.3% OF TOTAL INVESTMENTS)
12,235 Chelan County Public Utility District 1, Washington, Columbia No Opt. Call AAA 5,128,056
River-Rock Island Hydro-Electric System Revenue Refunding Bonds,
Series 1997A, 0.000%, 6/01/26 - MBIA Insured
3,100 Cowlitz County Public Utilities District 1, Washington, Electric 9/14 at 100.00 AAA 3,264,982
Production Revenue Bonds, Series 2004, 5.000%, 9/01/28 -
FGIC Insured
5,000 Energy Northwest, Washington, Electric Revenue Refunding Bonds, 7/13 at 100.00 Aaa 5,488,450
Nuclear Project 1, Series 2003A, 5.500%, 7/01/16
10,000 Washington State Healthcare Facilities Authority, Revenue Bonds, 10/16 at 100.00 AAA 10,113,100
Providence Health Care Services, Series 2006A, 4.625%, 10/01/34
- FGIC Insured
4,685 Washington State Healthcare Facilities Authority, Revenue Bonds, 12/09 at 101.00 AAA 4,970,972
Providence Services, Series 1999, 5.375%, 12/01/19
(Pre-refunded 12/01/09) - MBIA Insured
5,000 Washington State Housing Finance Commission, Non-Profit Housing 7/09 at 101.00 AA 5,313,500
Revenue Bonds, Kline Galland Center, Series 1999, 6.000%,
7/01/29 - RAAI Insured
12,000 Washington, Motor Vehicle Fuel Tax General Obligation Bonds, 1/11 at 100.00 Aa1 12,543,960
Series 2001D, 5.250%, 1/01/26
------------------------------------------------------------------------------------------------------------------------------------
52,020 Total Washington 46,823,020
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.5% (0.4% OF TOTAL INVESTMENTS)
5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 5,176,900
Appalachian Power Company, Series 2003L, 5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
33
Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.1% (1.4% OF TOTAL INVESTMENTS)
$ 11,620 Wisconsin Health and Educational Facilities Authority, Revenue 2/10 at 101.00 AA $ 12,543,674
Bonds, Marshfield Clinic, Series 1999, 6.250%, 2/15/29 -
RAAI Insured
7,490 Wisconsin Health and Educational Facilities Authority, Revenue 7/08 at 103.00 N/R 7,639,500
Bonds, Millennium Housing Foundation Inc., Series 1998,
6.100%, 1/01/28
------------------------------------------------------------------------------------------------------------------------------------
19,110 Total Wisconsin 20,183,174
------------------------------------------------------------------------------------------------------------------------------------
$ 1,532,930 Total Investments (cost $1,303,450,908) - 148.8% 1,406,801,730
============------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.9% 17,420,499
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.7)% (479,000,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 945,222,229
=====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's or Moody's
rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's
Investor Service, Inc. are considered to be below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
N/R Not rated.
(ETM) Escrowed to maturity.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
Nuveen Municipal Advantage Fund, Inc. (NMA)
Portfolio of
INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 3.1% (2.1% OF TOTAL INVESTMENTS)
$ 10,000 Jefferson County, Alabama, Sewer Revenue Capital Improvement 2/09 at 101.00 AAA $ 10,488,700
Warrants, Series 1999A, 5.375%, 2/01/36 (Pre-refunded 2/01/09)
- FGIC Insured
5,075 Lauderdale County and Florence Healthcare Authority, Alabama, 7/09 at 101.00 AAA 5,297,691
Revenue Bonds, Coffee Health Group, Series 1999A, 5.250%,
7/01/24 - MBIA Insured
5,155 Phenix City Industrial Development Board, Alabama, Environmental 5/12 at 100.00 BBB 5,550,389
Improvement Revenue Bonds, MeadWestvaco Corporation, Series
2002A, 6.350%, 5/15/35 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
20,230 Total Alabama 21,336,780
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.4% (0.3% OF TOTAL INVESTMENTS)
Alaska Housing Finance Corporation, General Housing Purpose Bonds,
Series 2005A:
1,125 5.250%, 12/01/34 - FGIC Insured 12/14 at 100.00 AAA 1,207,215
1,280 5.250%, 12/01/41 - FGIC Insured 12/14 at 100.00 AAA 1,363,597
------------------------------------------------------------------------------------------------------------------------------------
2,405 Total Alaska 2,570,812
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.7% (0.5% OF TOTAL INVESTMENTS)
5,000 Maricopa County Pollution Control Corporation, Arizona, Remarketed 11/06 at 101.00 BBB 5,056,800
Revenue Refunding Bonds, Public Service Company of New Mexico,
Series 1992A, 5.750%, 11/01/22
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 11.8% (8.0% OF TOTAL INVESTMENTS)
2,500 Alameda Corridor Transportation Authority, California, Subordinate 10/17 at 100.00 AAA 2,028,775
Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/25 -
AMBAC Insured
Calexico Unified School District, Imperial County, California,
General Obligation Bonds, Series 2005B:
4,070 0.000%, 8/01/32 - FGIC Insured No Opt. Call AAA 1,294,016
6,410 0.000%, 8/01/34 - FGIC Insured No Opt. Call AAA 1,854,349
3,000 California Health Facilities Financing Authority, Health Facility 3/13 at 100.00 A 3,084,180
Revenue Bonds, Adventist Health System/West, Series 2003A,
5.000%, 3/01/33
7,500 California State Public Works Board, Lease Revenue Bonds, 6/14 at 100.00 A 7,913,925
Department of Mental Health, Coalinga State Hospital, Series
2004A, 5.125%, 6/01/29
9,955 Capistrano Unified School District, Orange County, California, No Opt. Call AAA 3,353,342
Special Tax Bonds, Community Facilities District, Series 2005,
0.000%, 9/01/31 - FGIC Insured
Colton Joint Unified School District, San Bernardino County,
California, General Obligation Bonds, Series 2006C:
3,800 0.000%, 2/01/33 - FGIC Insured 2/15 at 38.73 AAA 998,298
3,795 0.000%, 2/01/37 - FGIC Insured No Opt. Call AAA 970,230
7,535 Contra Costa County, California, GNMA Mortgage-Backed Securities No Opt. Call AAA 9,775,683
Program Home Mortgage Revenue Bonds, Series 1989, 7.750%,
5/01/22 (Alternative Minimum Tax) (ETM)
8,145 Cupertino Union School District, Santa Clara County, California, 8/13 at 55.54 AAA 3,339,043
General Obligation Bonds, Series 2003B, 0.000%, 8/01/25 -
FGIC Insured
2,990 East Bay Municipal Utility District, Alameda and Contra Costa 6/21 at 100.00 AAA 2,991,615
Counties, California, Water System Subordinated Revenue
Refunding Bonds, Series 1996, 4.750%, 6/01/21 - FGIC Insured
2,000 Folsom Cordova Unified School District, Sacramento County, No Opt. Call AAA 760,640
California, General Obligation Bonds, School Facilities
Improvement District 1, Series 2004B, 0.000%, 10/01/28 -
MBIA Insured
3,360 Folsom Cordova Unified School District, Sacramento County, No Opt. Call AAA 1,358,515
California, General Obligation Bonds, School Facilities
Improvement District 2, Series 2002A, 0.000%, 7/01/27 -
MBIA Insured
2,315 Gateway Unified School District, California, General Obligation No Opt. Call AAA 736,031
Bonds, Series 2004B, 0.000%, 8/01/32 - FGIC Insured
35
Nuveen Municipal Advantage Fund, Inc. (NMA) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 3,000 Golden State Tobacco Securitization Corporation, California, No Opt. Call AAA $ 1,269,270
Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A,
0.000%, 6/01/26 - FSA Insured
1,275 Madera Unified School District, Madera County, California, General 8/12 at 100.00 AAA 1,373,711
Obligation Bonds, Series 2002, 5.250%, 8/01/23 - FSA Insured
North Orange County Community College District, California,
General Obligation Bonds, Series 2003B:
7,735 0.000%, 8/01/25 - FGIC Insured No Opt. Call AAA 3,401,466
4,000 0.000%, 8/01/26 - FGIC Insured No Opt. Call AAA 1,680,320
5,000 Palmdale Community Redevelopment Agency, California, Residential No Opt. Call AAA 5,775,150
Mortgage Revenue Refunding Bonds, Series 1991B, 7.375%,
2/01/12 (ETM)
5,000 Palmdale Community Redevelopment Agency, California, Single Family No Opt. Call AAA 6,643,750
Restructured Mortgage Revenue Bonds, Series 1986A, 8.000%,
3/01/16 (Alternative Minimum Tax) (ETM)
9,315 Perris, California, GNMA Mortgage-Backed Securities Program Single No Opt. Call AAA 11,628,101
Family Mortgage Revenue Bonds, Series 1989A, 7.600%, 1/01/23
(Alternative Minimum Tax) (ETM)
23,000 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AAA 6,448,050
California, Toll Road Revenue Refunding Bonds, Series 1997A,
0.000%, 1/15/35 - MBIA Insured
7,250 San Jose-Evergreen Community College District, Santa Clara County, 9/15 at 100.00 AAA 2,307,748
California, General Obligation Bonds, Series 2005A, 0.000%,
9/01/29 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
132,950 Total California 80,986,208
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 6.6% (4.5% OF TOTAL INVESTMENTS)
8,350 Colorado Health Facilities Authority, Remarketed Revenue Bonds, 1/07 at 102.00 AAA 8,528,440
Kaiser Permanente System, Series 1994A, 5.350%, 11/01/16 (ETM)
9,440 Colorado Health Facilities Authority, Revenue Bonds, Catholic 9/16 at 100.00 AA 9,321,339
Health Initiatives, Series 2006A, 4.500%, 9/01/38 (WI/DD,
Settling 11/09/06)
4,335 Denver City and County, Colorado, Airport Revenue Bonds, Series 11/16 at 100.00 AAA 5,244,830
2006, 7.281%, 11/15/25 - FGIC Insured (IF)
2,000 Denver Convention Center Hotel Authority, Colorado, Senior Revenue 11/16 at 100.00 AAA 2,050,440
Bonds, Convention Center Hotel, Series 2006, 4.750%, 12/01/35 -
XLCA Insured
E-470 Public Highway Authority, Colorado, Senior Revenue Bonds,
Series 1997B:
2,650 0.000%, 9/01/16 - MBIA Insured No Opt. Call AAA 1,783,636
8,160 0.000%, 9/01/26 - MBIA Insured No Opt. Call AAA 3,408,758
1,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 102.00 AAA 1,095,810
Series 2000A, 5.750%, 9/01/35 (Pre-refunded 9/01/10) -
MBIA Insured
E-470 Public Highway Authority, Colorado, Senior Revenue Bonds,
Series 2000B:
7,500 0.000%, 9/01/29 - MBIA Insured No Opt. Call AAA 2,739,375
10,000 0.000%, 9/01/32 - MBIA Insured No Opt. Call AAA 3,183,600
Platte River Power Authority, Colorado, Power Revenue Refunding
Bonds, Series 2002EE:
2,000 5.375%, 6/01/17 6/12 at 100.00 AA 2,168,060
5,000 5.375%, 6/01/18 6/12 at 100.00 AA 5,414,900
------------------------------------------------------------------------------------------------------------------------------------
60,435 Total Colorado 44,939,188
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.4% (0.2% OF TOTAL INVESTMENTS)
1,725 District of Columbia Housing Finance Agency, GNMA/FNMA Single 6/07 at 102.00 AAA 1,754,084
Family Mortgage Revenue Bonds, Series 1997B, 5.900%, 12/01/28
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 1.9% (1.3% OF TOTAL INVESTMENTS)
2,770 Florida Housing Finance Corporation, Housing Revenue Bonds, 12/10 at 100.00 AAA 2,881,465
Stratford Point Apartments, Series 2000O-1, 5.850%, 12/01/31 -
FSA Insured (Alternative Minimum Tax)
10,130 Tampa, Florida, Healthcare System Revenue Bonds, Allegany Health 12/06 at 100.00 AAA 10,204,152
System - St. Mary's Hospital, Series 1993, 5.125%, 12/01/23 -
MBIA Insured (ETM)
------------------------------------------------------------------------------------------------------------------------------------
12,900 Total Florida 13,085,617
------------------------------------------------------------------------------------------------------------------------------------
36
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 0.6% (0.4% OF TOTAL INVESTMENTS)
$ 4,000 Augusta, Georgia, Water and Sewerage Revenue Bonds, Series 2004, 10/14 at 100.00 AAA $ 4,315,160
5.250%, 10/01/39 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,215 Hawaii Housing and Community Development Corporation, GNMA 7/10 at 102.00 AAA 2,333,325
Collateralized Multifamily Housing Revenue Bonds, Sunset Villas,
Series 2000, 5.700%, 7/20/31
705 Hawaii Housing Finance and Development Corporation, Single Family 7/07 at 102.00 AAA 708,680
Mortgage Purchase Revenue Bonds, Series 1997A, 5.750%, 7/01/30
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,920 Total Hawaii 3,042,005
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 15.9% (10.8% OF TOTAL INVESTMENTS)
12,500 Chicago Board of Education, Illinois, Unlimited Tax General 12/07 at 102.00 AAA 12,932,875
Obligation Bonds, Dedicated Tax Revenues, Series 1997A, 5.250%,
12/01/27 - AMBAC Insured
4,000 Chicago Board of Education, Illinois, Unlimited Tax General 12/07 at 102.00 AAA 4,171,120
Obligation Bonds, Dedicated Tax Revenues, Series 1997, 5.750%,
12/01/20 (Pre-refunded 12/01/07) - AMBAC Insured
2,175 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 824,695
Obligation Bonds, Dedicated Tax Revenues, Series 1998B-1,
0.000%, 12/01/28 - FGIC Insured
2,250 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 747,833
Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 0.000%,
12/01/31 - FGIC Insured
5,865 Chicago, Illinois, General Obligation Bonds, Neighborhoods Alive 7/10 at 101.00 AAA 6,500,766
21 Program, Series 2000A, 6.500%, 1/01/35 (Pre-refunded 7/01/10)
- FGIC Insured
5,000 Chicago, Illinois, Second Lien Passenger Facility Charge Revenue 1/11 at 101.00 AAA 5,234,300
Bonds, O'Hare International Airport, Series 2001A, 5.375%,
1/01/32 - AMBAC Insured (Alternative Minimum Tax)
5,000 Chicago, Illinois, Second Lien Wastewater Transmission Revenue 1/08 at 102.00 AAA 5,192,300
Bonds, Series 1997, 5.250%, 1/01/28 (Pre-refunded 1/01/08) -
AMBAC Insured
6,000 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 Baa2 6,398,760
Medical Center, Series 2002, 5.750%, 5/15/22
6,165 Illinois Health Facilities Authority, Revenue Bonds, Sarah Bush 2/07 at 102.00 A 6,310,926
Lincoln Health Center, Series 1996B, 5.750%, 2/15/22
4,210 Illinois Health Facilities Authority, Revenue Bonds, Victory 8/07 at 101.00 Ba2(4) 4,305,988
Health Services, Series 1997A, 5.375%, 8/15/16
(Pre-refunded 8/15/07)
10,740 Lake and McHenry Counties Community Unit School District 118, 1/15 at 66.94 Aaa 5,006,881
Wauconda, Illinois, General Obligation Bonds, Series 2005B,
0.000%, 1/01/23 - FSA Insured
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Bonds, McCormick Place Expansion Project, Series 1999A:
13,455 5.500%, 12/15/24 - FGIC Insured 12/09 at 101.00 AAA 14,270,104
10,430 5.250%, 12/15/28 - FGIC Insured 12/09 at 101.00 AAA 10,963,599
3,175 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 685,705
Bonds, McCormick Place Expansion Project, Series 2002A, 0.000%,
6/15/41 - MBIA Insured
6,000 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 2,800,980
Refunding Bonds, McCormick Place Expansion Project, Series
1996A, 0.000%, 6/15/24 - MBIA Insured
4,600 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 5,790,618
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1990A, 7.200%, 11/01/20 - AMBAC Insured
1,940 University of Illinois, Auxiliary Facilities Systems Revenue 4/13 at 100.00 AAA 2,053,277
Bonds, Series 2003A, 5.000%, 4/01/23 - AMBAC Insured
7,500 Valley View Public Schools, Community Unit School District 365U of No Opt. Call AAA 3,262,125
Will County, Illinois, General Obligation Bonds, Series 2005,
0.000%, 11/01/25 - MBIA Insured
23,125 Will County Community High School District 210 Lincoln-Way, No Opt. Call Aaa 10,936,275
Illinois, General Obligation Bonds, Series 2006, 0.000%,
1/01/24 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
134,130 Total Illinois 108,389,127
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.5% (2.4% OF TOTAL INVESTMENTS)
5,205 Indiana Health Facility Financing Authority, Hospital Revenue 8/10 at 101.50 AAA 5,615,414
Bonds, Clarian Health Obligated Group, Series 2000A, 5.500%,
2/15/30 (Pre-refunded 8/15/10) - MBIA Insured
37
Nuveen Municipal Advantage Fund, Inc. (NMA) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDIANA (continued)
$ 9,000 Indiana Health Facility Financing Authority, Hospital Revenue 11/06 at 102.00 AAA $ 9,192,870
Refunding and Improvement Bonds, Community Hospitals of Indiana,
Series 1995, 5.700%, 5/15/22 - MBIA Insured
6,075 LaGrange County Jail Building Corporation, Indiana, First Mortgage 10/09 at 101.00 A3(4) 6,434,093
Jail Bonds, Series 1998, 5.400%, 10/01/21
(Pre-refunded 10/01/09)
2,725 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, 2/09 at 102.00 BBB 2,839,695
Madison Center Inc., Series 1999, 5.450%, 2/15/12
------------------------------------------------------------------------------------------------------------------------------------
23,005 Total Indiana 24,082,072
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 1.8% (1.2% OF TOTAL INVESTMENTS)
5,000 Burlington, Kansas, Environmental Improvement Revenue Bonds, 9/15 at 100.00 A3 5,040,950
Kansas City Power and Light Company Project, Series 1998A,
4.750%, 9/01/15 (Mandatory put 10/01/07)
4,935 Kansas Department of Transportation, Highway Revenue Bonds, 3/14 at 100.00 AAA 5,263,474
Series 2004A, 5.000%, 3/01/22
1,750 Wamego, Kansas, Pollution Control Revenue Bonds, Kansas Gas and 6/14 at 100.00 AAA 1,881,495
Electric Company, Series 2004, 5.300%, 6/01/31 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
11,685 Total Kansas 12,185,919
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.6% (1.1% OF TOTAL INVESTMENTS)
5,500 Louisville and Jefferson County Metropolitan Sewer District, 5/07 at 101.00 AAA 5,597,130
Kentucky, Sewer and Drainage System Revenue Bonds, Series 1997A,
5.250%, 5/15/27 - MBIA Insured
4,950 Louisville and Jefferson County Metropolitan Sewer District, 11/07 at 101.00 AAA 5,068,058
Kentucky, Sewer and Drainage System Revenue Bonds, Series 1997B,
5.200%, 5/15/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
10,450 Total Kentucky 10,665,188
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 9.1% (6.2% OF TOTAL INVESTMENTS)
13,500 DeSoto Parish, Louisiana, Pollution Control Revenue Refunding 9/09 at 102.00 AAA 14,525,458
Bonds, Cleco Utility Group Inc. Project, Series 1999, 5.875%,
9/01/29 - AMBAC Insured
8,720 Louisiana Public Facilities Authority, Extended Care Facilities No Opt. Call BBB 10,899,128
Revenue Bonds, Comm-Care Corporation Project,
Series 1994, 11.000%, 2/01/14
6,650 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AAA 7,105,525
General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured
6,925 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 6,763,094
Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) -
FGIC Insured (IF)
3,335 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 3,920,559
Residuals 660-2, 7.348%, 5/01/41 (WI/DD, Settling 11/02/06) -
FGIC Insured (IF)
Tobacco Settlement Financing Corporation, Louisiana, Tobacco
Settlement Asset-Backed Bonds, Series 2001B:
6,000 5.500%, 5/15/30 5/11 at 101.00 BBB 6,301,560
11,750 5.875%, 5/15/39 5/11 at 101.00 BBB 12,514,808
------------------------------------------------------------------------------------------------------------------------------------
56,880 Total Louisiana 62,030,132
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.1% (0.8% OF TOTAL INVESTMENTS)
1,750 Massachusetts Health and Educational Facilities Authority, 1/09 at 101.00 AAA 1,797,355
Revenue Bonds, UMass Memorial Healthcare, Series 1998A, 5.000%,
7/01/28 - AMBAC Insured
830 Massachusetts Housing Finance Agency, Single Family Housing 12/09 at 100.00 AAA 846,227
Revenue Bonds, Series 77, 5.950%, 6/01/25 - FSA Insured
(Alternative Minimum Tax)
5,000 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102.00 AAA 5,108,350
Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
7,580 Total Massachusetts 7,751,932
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.7% (1.1% OF TOTAL INVESTMENTS)
Michigan State Hospital Finance Authority, Hospital Revenue Bonds,
Detroit Medical Center Obligated Group, Series 1998A:
4,995 5.250%, 8/15/23 8/08 at 101.00 BB- 5,065,030
3,000 5.250%, 8/15/28 8/08 at 101.00 BB- 3,036,570
38
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN (continued)
$ 3,275 Michigan State Hospital Finance Authority, Revenue Refunding 2/07 at 100.00 BB- $ 3,277,260
Bonds, Detroit Medical Center Obligated Group, Series 1993A,
6.500%, 8/15/18
------------------------------------------------------------------------------------------------------------------------------------
11,270 Total Michigan 11,378,860
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 1.5% (1.0% OF TOTAL INVESTMENTS)
5,000 Minneapolis-St. Paul Metropolitan Airports Commission, Minnesota, 1/11 at 100.00 AAA 5,251,100
Subordinate Airport Revenue Bonds, Series 2001C, 5.250%,
1/01/32 - FGIC Insured
3,030 Minnesota Housing Finance Agency, Single Family Mortgage Revenue 7/09 at 100.00 AA+ 3,061,482
Bonds, Series 2000C, 5.550%, 7/01/24 (Alternative Minimum Tax)
2,025 Minnesota Housing Finance Agency, Single Family Mortgage Revenue 1/10 at 100.00 AA+ 2,040,167
Bonds, Series 2000J, 5.400%, 1/01/23 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
10,055 Total Minnesota 10,352,749
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.9% (0.6% OF TOTAL INVESTMENTS)
11,705 Kansas City Municipal Assistance Corporation, Missouri, Leasehold No Opt. Call AAA 4,395,110
Revenue Bonds, Series 2004B-1, 0.000%, 4/15/29 - AMBAC Insured
200 Missouri Housing Development Commission, Single Family Mortgage 9/09 at 102.00 AAA 208,048
Revenue Bonds, Homeownership Loan Program, Series 2000A-1,
7.500%, 3/01/31 (Alternative Minimum Tax)
1,500 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 1,578,225
Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink
Cross County Extension Project, Series 2002B, 5.000%,
10/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
13,405 Total Missouri 6,181,383
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 1.0% (0.7% OF TOTAL INVESTMENTS)
6,920 Montana Board of Housing, Single Family Mortgage Bonds, Series 6/07 at 101.50 AA+ 7,075,285
1997A-1, 6.050%, 12/01/37
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.6% (2.4% OF TOTAL INVESTMENTS)
7,310 Clark County, Nevada, Limited Tax General Obligation Bank Bonds, 7/10 at 100.00 AA+(4) 7,796,919
Series 2000, 5.500%, 7/01/19 (Pre-refunded 7/01/10)
7,500 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/10 at 101.00 AAA 8,190,675
Series 1999A, 6.000%, 7/01/29 (Pre-refunded 7/01/10) -
MBIA Insured
7,910 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 8,244,356
Revenue Bonds, Las Vegas Monorail Project, First Tier, Series
2000, 5.375%, 1/01/40 - AMBAC Insured
430 Nevada Housing Division, Single Family Mortgage Bonds, Senior 4/07 at 102.00 Aaa 432,774
Series 1997C-2, 5.750%, 4/01/29 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
23,150 Total Nevada 24,664,724
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 3.9% (2.6% OF TOTAL INVESTMENTS)
15,000 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 5,349,900
System Bonds, Series 2006C, 0.000%, 12/15/30 - FGIC Insured
Tobacco Settlement Financing Corporation, New Jersey, Tobacco
Settlement Asset-Backed Bonds, Series 2002:
14,690 5.750%, 6/01/32 6/12 at 100.00 BBB 15,613,118
5,050 6.125%, 6/01/42 6/12 at 100.00 BBB 5,483,391
------------------------------------------------------------------------------------------------------------------------------------
34,740 Total New Jersey 26,446,409
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 1.1% (0.7% OF TOTAL INVESTMENTS)
7,500 Farmington, New Mexico, Pollution Control Revenue Refunding Bonds, 4/07 at 100.50 BBB 7,530,300
Public Service Company of New Mexico - San Juan Project,
Series 1997B, 5.800%, 4/01/22
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 16.2% (11.0% OF TOTAL INVESTMENTS)
4,395 Dormitory Authority of the State of New York, Revenue Bonds, 2/07 at 102.00 AA- 4,504,304
Mental Health Services Facilities Improvements, Series 1997B,
5.625%, 2/15/21
2,965 Dormitory Authority of the State of New York, Revenue Bonds, 2/07 at 102.00 AA-(4) 3,041,586
Mental Health Services Facilities Improvements, Series 1997B,
5.625%, 2/15/21 (Pre-refunded 2/15/07)
39
Nuveen Municipal Advantage Fund, Inc. (NMA) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
$ 3,655 Dormitory Authority of the State of New York, Revenue Bonds, State 5/08 at 101.00 AA-(4) $ 3,779,233
University Educational Facilities, Series 1997, 5.125%, 5/15/27
(Pre-refunded 5/15/08)
7,000 Metropolitan Transportation Authority, New York, State Service 7/12 at 100.00 AA- 7,395,360
Contract Refunding Bonds, Series 2002A, 5.125%, 1/01/29
Nassau County, New York, General Obligation Improvement Bonds,
Series 2000F:
3,980 7.000%, 3/01/11 (Pre-refunded 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,413,780
4,070 7.000%, 3/01/12 (Pre-refunded 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,513,589
3,925 7.000%, 3/01/15 (Pre-refunded 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,352,786
4,975 New York City Industrial Development Agency, New York, Special 12/08 at 102.00 Ba2 4,891,470
Facilities Revenue Bonds, British Airways PLC, Series 1998,
5.250%, 12/01/32 (Alternative Minimum Tax)
3,000 New York City Industrial Development Agency, New York, Special 12/12 at 101.00 Ba2 3,368,670
Facilities Revenue Bonds, British Airways PLC, Series 2002,
7.625%, 12/01/32 (Alternative Minimum Tax)
5,000 New York City Municipal Water Finance Authority, New York, Water 6/07 at 101.00 AAA 5,118,750
and Sewerage System Revenue Bonds, Fiscal Series 1997B, 5.750%,
6/15/29 (Pre-refunded 6/15/07) - FGIC Insured
9,850 New York City Municipal Water Finance Authority, New York, Water 6/09 at 101.00 AAA 10,496,554
and Sewerage System Revenue Bonds, Fiscal Series 2000A, 5.750%,
6/15/31 (Pre-refunded 6/15/09) - FGIC Insured
10,000 New York City Municipal Water Finance Authority, New York, Water 12/14 at 100.00 AAA 10,570,000
and Sewerage System Revenue Bonds, Fiscal Series 2005B, 5.000%,
6/15/36 - FSA Insured
10,000 New York City Transitional Finance Authority, New York, Future Tax 5/10 at 101.00 AAA 10,913,600
Secured Bonds, Fiscal Series 2000B, 6.000%, 11/15/29
(Pre-refunded 5/15/10)
10,000 New York City, New York, General Obligation Bonds, Fiscal Series 10/07 at 101.00 Aaa 10,333,800
1997G, 6.000%, 10/15/26 (Pre-refunded 10/15/07)
7,435 New York City, New York, General Obligation Bonds, Fiscal Series 5/10 at 101.00 AA-(4) 8,055,525
2000A, 5.750%, 5/15/20 (Pre-refunded 5/15/10)
9,025 New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, 4/10 at 100.00 Aa1 9,381,036
Series 94, 5.800%, 10/01/20 (Alternative Minimum Tax)
5,000 New York State Urban Development Corporation, Service Contract 1/09 at 101.00 AAA 5,307,450
Revenue Bonds, Correctional Facilities, Series 1999C, 6.000%,
1/01/29 (Pre-refunded 1/01/09) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
104,275 Total New York 110,437,493
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 2.6% (1.7% OF TOTAL INVESTMENTS)
1,175 North Carolina Housing Finance Agency, Home Ownership Revenue 7/10 at 100.00 AAA 1,202,366
Bonds, 1998 Trust Agreement, Series 10A, 5.400%, 7/01/32 -
AMBAC Insured (Alternative Minimum Tax)
6,720 North Carolina Housing Finance Agency, Home Ownership Revenue 7/09 at 100.00 AA 6,941,088
Bonds, 1998 Trust Agreement, Series 7A, 6.250%, 1/01/29
(Alternative Minimum Tax)
3,860 North Carolina Housing Finance Agency, Home Ownership Revenue 1/10 at 100.00 AA 3,899,488
Bonds, 1998 Trust Agreement, Series 8A, 5.950%, 1/01/27
(Alternative Minimum Tax)
5,265 North Carolina Housing Finance Agency, Home Ownership Revenue 1/10 at 100.00 AA 5,431,374
Bonds, 1998 Trust Agreement, Series 9A, 5.875%, 7/01/31
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
17,020 Total North Carolina 17,474,316
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.7% (0.5% OF TOTAL INVESTMENTS)
2,190 North Dakota Housing Finance Agency, Home Mortgage Finance Program 7/08 at 102.00 Aaa 2,219,959
Bonds, Series 1998B, 5.500%, 7/01/29 - MBIA Insured
(Alternative Minimum Tax)
2,250 Ward County Health Care, North Dakota, Revenue Bonds, Trinity 7/16 at 100.00 BBB+ 2,360,903
Obligated Group, Series 2006, 5.125%, 7/01/25
(WI/DD, Settling 11/01/06)
------------------------------------------------------------------------------------------------------------------------------------
4,440 Total North Dakota 4,580,862
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 4.4% (3.0% OF TOTAL INVESTMENTS)
5,000 Akron, Bath and Copley Joint Township Hospital District, Ohio, 11/09 at 101.00 Baa1 5,172,150
Hospital Facilities Revenue Bonds, Summa Health System, Series
1998A, 5.375%, 11/15/18
6,000 Cuyahoga County, Ohio, Hospital Revenue Bonds, University 7/09 at 101.00 AAA 6,318,480
Hospitals Health System, Series 1999, 5.500%, 1/15/30 -
AMBAC Insured
40
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
OHIO (continued)
Montgomery County, Ohio, Hospital Facilities Revenue Bonds,
Kettering Medical Center, Series 1999:
$ 7,840 6.750%, 4/01/18 (Pre-refunded 4/01/10) 4/10 at 101.00 A(4) $ 8,687,034
5,000 6.750%, 4/01/22 (Pre-refunded 4/01/10) 4/10 at 101.00 A(4) 5,540,200
1,600 Ohio Housing Finance Agency, GNMA Mortgage-Backed Securities 8/10 at 100.00 Aaa 1,619,568
Program Residential Mortgage Revenue Bonds, Series 2000D,
5.450%, 9/01/31 (Alternative Minimum Tax)
2,650 Ohio, General Obligation Bonds, Higher Education, Series 2003A, 5/13 at 100.00 AA+ 2,812,816
5.000%, 5/01/22
------------------------------------------------------------------------------------------------------------------------------------
28,090 Total Ohio 30,150,248
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 2.3% (1.5% OF TOTAL INVESTMENTS)
2,890 Oklahoma State Industries Authority, Health System Revenue Bonds, 8/09 at 101.00 AAA 3,059,672
Integris Baptist Medical Center, Series 1999A, 5.750%, 8/15/29 -
MBIA Insured
2,110 Oklahoma State Industries Authority, Health System Revenue Bonds, 8/09 at 101.00 AAA 2,248,036
Integris Baptist Medical Center, Series 1999A, 5.750%, 8/15/29
(Pre-refunded 8/15/09) - MBIA Insured
10,000 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding Bonds, 12/08 at 100.00 B 10,083,300
American Airlines Inc., Series 2001B, 5.650%, 12/01/35
(Mandatory put 12/01/08) (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
15,000 Total Oklahoma 15,391,008
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 1.2% (0.8% OF TOTAL INVESTMENTS)
1,930 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 2,032,367
Resource Recovery Revenue Refunding Bonds, Panther Creek
Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative
Minimum Tax)
2,600 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Series 12/14 at 100.00 AAA 2,886,910
2004A, 5.500%, 12/01/31 - AMBAC Insured
3,240 Washington County Authority, Pennsylvania, Capital Funding Revenue No Opt. Call AAA 3,470,850
Bonds, Capital Projects and Equipment Acquisition Program,
Series 1999, 6.150%, 12/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
7,770 Total Pennsylvania 8,390,127
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 1.4% (1.0% OF TOTAL INVESTMENTS)
5,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/15 at 100.00 AAA 5,345,900
2005RR, 5.000%, 7/01/26 - XLCA Insured
4,000 Puerto Rico, General Obligation Bonds, Series 2000B, 5.625%, 7/10 at 100.00 AAA 4,283,520
7/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
9,000 Total Puerto Rico 9,629,420
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 1.8% (1.3% OF TOTAL INVESTMENTS)
1,235 Rhode Island Health and Educational Building Corporation, Hospital 5/07 at 102.00 AAA 1,270,407
Financing Revenue Bonds, Lifespan Obligated Group, Series 1996,
5.500%, 5/15/16 - MBIA Insured
11,015 Rhode Island Health and Educational Building Corporation, Hospital 5/07 at 102.00 AAA 11,347,323
Financing Revenue Bonds, Lifespan Obligated Group, Series 1996,
5.500%, 5/15/16 (Pre-refunded 5/15/07) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
12,250 Total Rhode Island 12,617,730
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 4.1% (2.8% OF TOTAL INVESTMENTS)
10,000 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA-(4) 11,360,300
Purchase Revenue Bonds, Series 2002, 6.000%, 12/01/20
(Pre-refunded 12/01/12)
2,500 Lexington County Health Service District, South Carolina, Hospital 11/13 at 100.00 A 2,713,975
Revenue Refunding and Improvement Bonds, Series 2003, 5.750%,
11/01/28
3,000 Myrtle Beach, South Carolina, Hospitality and Accommodation Fee 6/14 at 100.00 AAA 3,145,440
Revenue Bonds, Series 2004A, 5.000%, 6/01/36 - FGIC Insured
1,220 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AAA 604,595
Bonds, Series 2004A-2, 0.000%, 1/01/23 - FGIC Insured
2,125 South Carolina Public Service Authority, Revenue Refunding Bonds, 7/13 at 100.00 AAA 2,273,176
Santee Cooper Electric System, Series 2003A, 5.000%, 1/01/21 -
AMBAC Insured
41
Nuveen Municipal Advantage Fund, Inc. (NMA) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA (continued)
$ 7,500 Tobacco Settlement Revenue Management Authority, South Carolina, 5/11 at 101.00 BBB $ 8,141,925
Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.375%, 5/15/28
------------------------------------------------------------------------------------------------------------------------------------
26,345 Total South Carolina 28,239,411
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 5.2% (3.6% OF TOTAL INVESTMENTS)
6,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Baa3 6,650,880
Tennessee, Hospital Revenue Bonds, Baptist Health System of East
Tennessee Inc., Series 2002, 6.500%, 4/15/31
20,415 Knox County Health, Educational and Housing Facilities Board, 1/13 at 75.87 AAA 11,857,032
Tennessee, Hospital Revenue Refunding Bonds, Covenant Health,
Series 2002A, 0.000%, 1/01/18 - FSA Insured
14,385 Metropolitan Government of Nashville-Davidson County Health and 11/09 at 101.00 AAA 15,443,590
Educational Facilities Board, Tennessee, Revenue Bonds,
Ascension Health Credit Group, Series 1999A, 5.875%, 11/15/28
(Pre-refunded 11/15/09) - AMBAC Insured
1,750 Metropolitan Government of Nashville-Davidson County, Tennessee, 5/11 at 100.00 AA 1,821,960
Electric System Revenue Bonds, Series 2001A, 5.125%, 5/15/26
------------------------------------------------------------------------------------------------------------------------------------
42,550 Total Tennessee 35,773,462
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 16.6% (11.3% OF TOTAL INVESTMENTS)
11,810 Brazos River Authority, Texas, Pollution Control Revenue Refunding No Opt. Call Baa2 12,566,549
Bonds, TXU Electric Company, Series 2001C, 5.750%, 5/01/36
(Mandatory put 11/01/11) (Alternative Minimum Tax)
6,000 Brazos River Authority, Texas, Revenue Refunding Bonds, Houston No Opt. Call AAA 6,544,920
Lighting and Power Company, Series 1998, 5.050%, 11/01/18 -
AMBAC Insured (Alternative Minimum Tax)
10,000 Central Texas Regional Mobility Authority, Travis and Williamson 1/15 at 100.00 AAA 10,417,800
Counties, Toll Road Revenue Bonds, Series 2005, 5.000%,
1/01/45 - FGIC Insured
4,250 Ennis Independent School District, Ellis County, Texas, General 8/16 at 60.73 Aaa 1,639,480
Obligation Bonds, Series 2006, 0.000%, 8/15/26
8,400 Gulf Coast Waste Disposal Authority, Texas, Waste Disposal Revenue 4/09 at 101.00 BBB 8,667,960
Bonds, Valero Energy Corporation, Series 1999, 5.700%, 4/01/32
(Alternative Minimum Tax)
5,000 Harris County Health Facilities Development Corporation, Texas, 11/13 at 100.00 AAA 5,215,150
Thermal Utility Revenue Bonds, TECO Project, Series 2003,
5.000%, 11/15/30 - MBIA Insured
1,540 Houston Community College, Texas, Limited Tax General Obligation 2/13 at 100.00 AAA 1,609,546
Bonds, Series 2003, 5.000%, 2/15/28 - AMBAC Insured
3,460 Houston Community College, Texas, Limited Tax General Obligation 2/13 at 100.00 AAA 3,726,212
Bonds, Series 2003, 5.000%, 2/15/28 (Pre-refunded 2/15/13) -
AMBAC Insured
13,110 Houston, Texas, Subordinate Lien Airport System Revenue Bonds, 7/10 at 100.00 AAA 13,888,472
Series 2000B, 5.500%, 7/01/30 - FSA Insured
Houston, Texas, Water Conveyance System Contract, Certificates of
Participation, Series 1993A-J:
5,490 6.800%, 12/15/10 - AMBAC Insured No Opt. Call AAA 6,130,409
2,000 6.800%, 12/15/11 - AMBAC Insured No Opt. Call AAA 2,282,780
9,345 Leander Independent School District, Williamson and Travis 8/15 at 35.34 AAA 2,199,252
Counties, Texas, General Obligation Bonds, Series 2005, 0.000%,
8/15/34 - FGIC Insured
16,305 Matagorda County Navigation District 1, Texas, Revenue Bonds, 5/09 at 101.00 BBB- 16,827,084
Reliant Energy Inc., Series 1999B, 5.950%, 5/01/30
(Alternative Minimum Tax)
3,425 Sabine River Authority, Texas, Pollution Control Revenue Refunding No Opt. Call Baa2 3,636,939
Bonds, TXU Electric Company, Series 2001A, 5.500%, 5/01/22
(Mandatory put 11/01/11)
4,700 Sam Rayburn Municipal Power Agency, Texas, Power Supply System 10/12 at 100.00 Baa2 5,000,988
Revenue Refunding Bonds, Series 2002A, 6.000%, 10/01/21
4,000 Texas, General Obligation Bonds, Water Financial Assistance, State 8/09 at 100.00 Aa1 4,186,360
Participation Program, Series 1999C, 5.500%, 8/01/35
6,840 Travis County Health Facilities Development Corporation, Texas, 11/09 at 101.00 AAA 7,343,356
Revenue Bonds, Ascension Health Credit Group, Series 1999A,
5.875%, 11/15/24 (Pre-refunded 11/15/09) - AMBAC Insured
245 Wood Glen Housing Finance Corporation, Texas, FHA-Insured 1/07 at 100.00 AAA 245,804
Section 8 Assisted Mortgage Revenue Bonds, Copperwood I Project,
Series 1990A, 7.625%, 1/01/10 - MBIA Insured (ETM)
42
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 3,000 Wylie Independent School District, Taylor County, Texas, General 8/15 at 74.57 AAA $ 1,522,140
Obligation Bonds, Series 2005, 0.000%, 8/15/21
------------------------------------------------------------------------------------------------------------------------------------
118,920 Total Texas 113,651,201
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.3% (0.2% OF TOTAL INVESTMENTS)
730 Intermountain Power Agency, Utah, Power Supply Revenue 7/07 at 102.00 AAA 754,930
Refunding Bonds, Series 1997B, 5.750%, 7/01/19 (Pre-refunded
7/01/07) - MBIA Insured
1,470 Intermountain Power Agency, Utah, Power Supply Revenue 7/07 at 102.00 AAA 1,518,510
Refunding Bonds, Series 1997B, 5.750%, 7/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
2,200 Total Utah 2,273,440
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 14.1% (9.6% OF TOTAL INVESTMENTS)
8,810 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 9,483,172
Consolidated System Revenue Bonds, Series 2001A, 5.600%,
1/01/36 - MBIA Insured (Alternative Minimum Tax)
5,665 Chelan County Public Utility District 1, Washington, Hydro 7/12 at 100.00 AAA 5,911,031
Consolidated System Revenue Bonds, Series 2002B, 5.250%,
7/01/37 - AMBAC Insured (Alternative Minimum Tax)
10,730 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 11,578,314
Consolidated System Revenue Refunding Bonds, Series 2001C,
5.650%, 7/01/32 - MBIA Insured (Alternative Minimum Tax)
10,730 Pierce County School District 320, Sumner, Washington, 12/10 at 100.00 Aaa 11,819,739
Unlimited Tax General Obligation Bonds, Series 2000,
6.250%, 12/01/17 (Pre-refunded 12/01/10) - FSA Insured
10,550 Port of Seattle, Washington, Limited Tax General Obligation 12/10 at 100.00 AAA 11,240,814
Bonds, Series 2000B, 5.750%, 12/01/25 (Alternative Minimum Tax)
5,315 Port of Seattle, Washington, Revenue Bonds, Series 2000B, No Opt. Call AAA 5,682,054
6.000%, 2/01/10 - MBIA Insured (Alternative Minimum Tax)
19,475 Port of Seattle, Washington, Special Facility Revenue 3/10 at 101.00 AAA 21,137,773
Bonds, Terminal 18, Series 1999A, 6.000%, 9/01/29
(Pre-refunded 3/01/10) - MBIA Insured
5,000 Port of Seattle, Washington, Special Facility Revenue 3/10 at 101.00 AAA 5,371,300
Bonds, Terminal 18, Series 1999B, 6.000%, 9/01/20 - MBIA
Insured (Alternative Minimum Tax)
8,750 Washington Public Power Supply System, Revenue Refunding 7/08 at 102.00 Aaa 9,092,913
Bonds, Nuclear Project 3, Series 1998A, 5.125%, 7/01/18
5,000 Washington State Healthcare Facilities Authority, Revenue 12/09 at 101.00 AAA 5,305,200
Bonds, Providence Services, Series 1999, 5.375%, 12/01/19
(Pre-refunded 12/01/09) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
90,025 Total Washington 96,622,310
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.8% (0.5% OF TOTAL INVESTMENTS)
5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 5,176,900
Bonds, Appalachian Power Company, Series 2003L, 5.500%,
10/01/22
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 3.0% (2.0% OF TOTAL INVESTMENTS)
7,055 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 7,627,795
Tobacco Settlement Asset-Backed
Bonds, Series 2002, 6.125%, 6/01/27
2,250 Green Bay, Wisconsin, Water System Revenue Bonds, Series 11/14 at 100.00 Aaa 2,378,295
2004, 5.000%, 11/01/29 - FSA Insured
5,000 Madison, Wisconsin, Industrial Development Revenue 4/12 at 100.00 AA- 5,392,000
Refunding Bonds, Madison Gas and Electric Company Projects,
Series 2002A, 5.875%, 10/01/34 (Alternative Minimum Tax)
43
Nuveen Municipal Advantage Fund, Inc. (NMA) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN (continued)
$ 3,000 Southeast Wisconsin Professional Baseball Park District, No Opt. Call AAA $ 3,470,790
Sales Tax Revenue Refunding Bonds,
Series 1998A, 5.500%, 12/15/19 - MBIA Insured
1,620 Wisconsin Housing and Economic Development Authority, Home 3/10 at 100.00 AA 1,630,141
Ownership Revenue Bonds, Series
2000B, 5.750%, 3/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
18,925 Total Wisconsin 20,499,021
------------------------------------------------------------------------------------------------------------------------------------
$ 1,095,145 Total Investments (cost $927,999,902) - 147.3% 1,006,727,683
============------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 5.1% 34,946,863
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.4)% (358,000,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 683,674,546
=====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's or Moody's
rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's
Investor Service, Inc. are considered to be below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
WI/DD Purchased on a when-issued or delayed delivery basis.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
44
Nuveen Municipal Market Opportunity Fund, Inc. (NMO)
Portfolio of
INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - 152.1% (100.0% OF TOTAL INVESTMENTS)
ALABAMA - 0.7% (0.4% OF TOTAL INVESTMENTS)
Henry County Water Authority, Alabama, Water Revenue Bonds, Series
2006:
$ 1,935 5.000%, 1/01/36 - RAAI Insured 1/16 at 100.00 AA $ 2,010,581
2,485 5.000%, 1/01/41 - RAAI Insured 1/16 at 100.00 AA 2,577,914
------------------------------------------------------------------------------------------------------------------------------------
4,420 Total Alabama 4,588,495
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.3% (0.3% OF TOTAL INVESTMENTS)
Alaska Housing Finance Corporation, General Housing Purpose Bonds,
Series 2005A:
1,125 5.250%, 12/01/34 - FGIC Insured 12/14 at 100.00 AAA 1,207,215
1,275 5.250%, 12/01/41 - FGIC Insured 12/14 at 100.00 AAA 1,358,270
------------------------------------------------------------------------------------------------------------------------------------
2,400 Total Alaska 2,565,485
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.0% (0.0% OF TOTAL INVESTMENTS)
105 Pima County Industrial Development Authority, Arizona, FNMA/GNMA 5/07 at 105.85 AAA 106,614
Single Family Mortgage Revenue Bonds, Series 1997A, 7.100%,
11/01/29 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 1.3% (0.8% OF TOTAL INVESTMENTS)
5,000 Arkansas Development Finance Authority, Hospital Revenue Bonds, 2/10 at 100.00 BBB (4) 5,494,900
Washington Regional Medical Center, Series 2000, 7.000%, 2/01/15
(Pre-refunded 2/01/10)
3,480 Cabot School District 4, Lonoke County, Arkansas, General 8/08 at 100.00 Aaa 3,545,111
Obligation Refunding Bonds, Series 2003, 5.000%, 2/01/27 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
8,480 Total Arkansas 9,040,011
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 8.7% (5.7% OF TOTAL INVESTMENTS)
1,350 Antelope Valley Union High School District, Los Angeles County, No Opt. Call AAA 498,218
California, General Obligation Bonds, Series 2004B, 0.000%,
8/01/29 - MBIA Insured
7,800 California County Tobacco Securitization Agency, Tobacco 12/18 at 100.00 Baa3 6,694,584
Settlement Asset-Backed Bonds, Los Angeles County Securitization
Corporation, Series 2006A, 0.000%, 6/01/36 (Mandatory
put 6/01/23)
1,000 California Department of Water Resources, Power Supply Revenue 5/12 at 101.00 Aaa 1,121,280
Bonds, Series 2002A, 5.750%, 5/01/17 (Pre-refunded 5/01/12)
1,350 California Educational Facilities Authority, Revenue Refunding No Opt. Call Aaa 308,516
Bonds, Loyola Marymount University, Series 2001A, 0.000%,
10/01/39 - MBIA Insured
4,295 California Health Facilities Financing Authority, Health Facility 3/13 at 100.00 A 4,415,518
Revenue Bonds, Adventist Health System/West, Series 2003A,
5.000%, 3/01/33
4,000 California Health Facilities Financing Authority, Revenue Bonds, 3/16 at 100.00 A+ 4,254,880
Kaiser Permanante System, Series 2006, 5.250%, 3/01/45
8,335 California State, General Obligation Bonds, Series 2006, Residuals 3/16 at 100.00 AAA 9,065,146
Series 1005, 6.805%, 3/01/35 - MBIA Insured (IF)
10,445 Castaic Lake Water Agency, California, Revenue Certificates of No Opt. Call AAA 3,854,727
Participation, Water System Improvement Project, Series 1999,
0.000%, 8/01/29 - AMBAC Insured
8,365 Cupertino Union School District, Santa Clara County, California, 8/13 at 52.66 AAA 3,240,852
General Obligation Bonds, Series 2003B, 0.000%, 8/01/26 - FGIC
Insured
5,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 5,415,450
Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2003B,
5.000%, 6/01/38 (Pre-refunded 6/01/13) - AMBAC Insured
3,500 Golden State Tobacco Securitization Corporation, California, No Opt. Call AAA 1,480,815
Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A,
0.000%, 6/01/26 - FSA Insured
45
Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 1,500 Lincoln Unified School District, Placer County, California, No Opt. Call AAA $ 627,825
Community Facilities District 1, Special Tax Bonds, Series 2005,
0.000%, 9/01/26 - AMBAC Insured
490 Los Angeles Department of Water and Power, California, Electric 4/07 at 100.00 AA-(4) 490,387
Plant Revenue Bonds, Second Series 1993, 4.750%, 10/15/20 (ETM)
995 Los Angeles Department of Water and Power, California, Electric 2/07 at 100.00 AA-(4) 996,433
Plant Revenue Bonds, Series 1994, 5.375%, 2/15/34 (ETM)
1,000 Pajaro Valley Unified School District, Santa Cruz County, No Opt. Call AAA 369,050
California, General Obligation Bonds, Series 2005B, 0.000%,
8/01/29 - FSA Insured
6,000 Placentia-Yorba Linda Unified School District, Orange County, No Opt. Call AAA 1,722,840
California, Certificates of Participation, Series 2006, 0.000%,
10/01/34 - FGIC Insured
San Joaquin Hills Transportation Corridor Agency, Orange County,
California, Toll Road Revenue Refunding Bonds, Series 1997A:
5,000 0.000%, 1/15/17 - MBIA Insured 1/14 at 102.00 AAA 5,379,600
26,000 0.000%, 1/15/35 - MBIA Insured No Opt. Call AAA 7,289,100
5,000 San Jose-Evergreen Community College District, Santa Clara 9/15 at 100.00 AAA 1,679,850
County, California, General Obligation Bonds, Series 2005A,
0.000%, 9/01/28 - MBIA Insured
4,825 Santa Monica Community College District, Los Angeles County, No Opt. Call AAA 1,980,470
California, General Obligation Bonds, Series 2005C, 0.000%,
8/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
106,250 Total California 60,885,541
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 5.4% (3.5% OF TOTAL INVESTMENTS)
1,085 Arkansas River Power Authority, Colorado, Power Revenue Bonds, 10/16 at 100.00 AAA 1,169,739
Series 2006, 5.250%, 10/01/40 - XLCA Insured
3,000 Broomfield, Colorado, Master Facilities Lease Purchase Agreement, 12/09 at 100.00 Aaa 3,175,770
Certificates of Participation, Series 1999, 5.750%, 12/01/24 -
AMBAC Insured
6,285 Broomfield, Colorado, Sales and Use Tax Revenue Refunding and 12/12 at 100.00 Aaa 6,870,951
Improvement Bonds, Series 2002A, 5.500%, 12/01/22 - AMBAC
Insured
11,465 Denver City and County, Colorado, Airport System Revenue Refunding 11/10 at 100.00 AAA 12,371,996
Bonds, Series 2000A, 6.000%, 11/15/18 - AMBAC Insured
(Alternative Minimum Tax)
20,000 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 31.42 AAA 5,447,600
Series 2000B, 0.000%, 9/01/28 (Pre-refunded 9/01/10) - MBIA
Insured
E-470 Public Highway Authority, Colorado, Toll Revenue Bonds,
Series 2004B:
3,800 0.000%, 9/01/27 - MBIA Insured 9/20 at 67.94 AAA 1,379,818
13,300 0.000%, 9/01/31 - MBIA Insured 9/20 at 53.77 AAA 3,827,873
6,250 0.000%, 9/01/32 - MBIA Insured 9/20 at 50.83 AAA 1,695,563
8,000 0.000%, 3/01/36 - MBIA Insured No Opt. Call AAA 1,769,600
------------------------------------------------------------------------------------------------------------------------------------
73,185 Total Colorado 37,708,910
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.5% (0.3% OF TOTAL INVESTMENTS)
3,265 Washington Convention Center Authority, District of Columbia, 10/08 at 100.00 AAA 3,285,961
Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 4.750%,
10/01/28 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 4.5% (3.0% OF TOTAL INVESTMENTS)
15,000 Atlanta, Georgia, Airport General Revenue Refunding Bonds, 1/10 at 101.00 AAA 16,086,450
Series 2000A, 5.600%, 1/01/30 (Pre-refunded 1/01/10) - FGIC
Insured
14,330 Fulton County Facilities Corporation, Georgia, Certificates of 11/10 at 101.00 AAA 15,412,918
Participation, Public Purpose Project, Series 1999, 5.500%,
11/01/18 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
29,330 Total Georgia 31,499,368
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 12.4% (8.1% OF TOTAL INVESTMENTS)
600 Bolingbrook, Illinois, General Obligation Refunding Bonds, Series No Opt. Call AAA 198,300
2002B, 0.000%, 1/01/32 - FGIC Insured
4,600 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 2,533,634
Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 0.000%,
12/01/20 - FGIC Insured
46
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 4,000 Chicago, Illinois, Motor Fuel Tax Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA $ 4,178,240
5.000%, 1/01/33 - AMBAC Insured
2,300 Chicago, Illinois, Motor Fuel Tax Revenue Refunding Bonds, Series No Opt. Call AAA 2,535,129
1993, 5.375%, 1/01/14 - AMBAC Insured
5,250 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1998B, 1/09 at 101.00 AAA 5,386,553
5.000%, 1/01/28 - MBIA Insured
3,335 Illinois Finance Authority, General Revenue Bonds, Northwestern 12/15 at 100.00 Aaa 3,845,155
University, Series 2006, Residuals Series 1489, 7.406%, 12/01/42
(IF)
5,210 Illinois Housing Development Authority, Section 8 Elderly Housing 1/07 at 100.00 BBB 5,313,419
Revenue Bonds, Garden House of River Oaks West Development,
Series 1992A, 6.875%, 1/01/20
38,645 Illinois, General Obligation Bonds, Illinois FIRST Program, Series 4/10 at 100.00 AAA 40,818,779
2000, 5.500%, 4/01/25 - MBIA Insured
Lake and McHenry Counties Community Unit School District 118,
Wauconda, Illinois, General Obligation Bonds, Series 2005B:
10,230 0.000%, 1/01/22 - FSA Insured 1/15 at 70.63 Aaa 5,039,605
6,780 0.000%, 1/01/24 - FSA Insured 1/15 at 63.44 Aaa 2,978,861
1,975 Lake County Community High School District 127, Grayslake, No Opt. Call AAA 2,550,673
Illinois, General Obligation Bonds, Series 2002A, 9.000%,
2/01/13 - FGIC Insured
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Bonds, McCormick Place Expansion Project, Series 2002A:
3,250 0.000%, 6/15/25 - MBIA Insured 6/22 at 101.00 AAA 2,149,745
3,270 5.000%, 12/15/28 - MBIA Insured 6/12 at 101.00 AAA 3,424,540
3,700 0.000%, 6/15/30 - MBIA Insured No Opt. Call AAA 1,338,808
3,060 0.000%, 6/15/37 - MBIA Insured No Opt. Call AAA 796,243
11,215 0.000%, 12/15/38 - MBIA Insured No Opt. Call AAA 2,724,348
4,170 0.000%, 6/15/39 - MBIA Insured No Opt. Call AAA 988,082
------------------------------------------------------------------------------------------------------------------------------------
111,590 Total Illinois 86,800,114
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 1.1% (0.7% OF TOTAL INVESTMENTS)
4,695 Indiana Educational Facilities Authority, Revenue Bonds, Butler 2/11 at 100.00 AAA 5,003,321
University, Series 2001, 5.500%, 2/01/26 - MBIA Insured
5,113 Indianapolis Airport Authority, Indiana, Special Facility Revenue 11/06 at 101.00 N/R 291,431
Bonds, AAR Corporation Assumed Lease, Series 1995, 6.500%,
11/15/31 (Alternative Minimum Tax) (6)
2,000 Petersburg, Indiana, Pollution Control Revenue Refunding Bonds, 8/11 at 102.00 Baa1 2,105,060
Indianapolis Power and Light Company, Series 1991, 5.750%,
8/01/21
------------------------------------------------------------------------------------------------------------------------------------
11,808 Total Indiana 7,399,812
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.6% (0.4% OF TOTAL INVESTMENTS)
4,215 Iowa Finance Authority, Solid Waste Disposal Revenue Bonds, No Opt. Call N/R 4,247,287
IPSCO Project, Series 1997, 6.000%, 6/01/27 (Mandatory put
6/01/07) (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.5% (0.3% OF TOTAL INVESTMENTS)
2,500 Kansas Development Finance Authority, Water Pollution Control 11/12 at 100.00 AAA 2,738,750
Revolving Fund Leveraged Bonds, Series 2002-II, 5.500%, 11/01/21
500 Salina, Kansas, Hospital Revenue Bonds, Salina Regional Medical 4/16 at 100.00 A1 502,255
Center, Series 2006, 4.625%, 10/01/31
------------------------------------------------------------------------------------------------------------------------------------
3,000 Total Kansas 3,241,005
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.6% (1.0% OF TOTAL INVESTMENTS)
Jefferson County School District Finance Corporation, Kentucky,
School Building Revenue Bonds, Series 2000A:
3,045 5.250%, 7/01/17 - FSA Insured 1/10 at 101.00 AAA 3,215,033
7,490 5.250%, 7/01/20 - FSA Insured 1/10 at 101.00 AAA 7,903,673
------------------------------------------------------------------------------------------------------------------------------------
10,535 Total Kentucky 11,118,706
------------------------------------------------------------------------------------------------------------------------------------
47
Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 1.6% (1.1% OF TOTAL INVESTMENTS)
$ 7,415 Louisiana Local Government Environmental Facilities and Community 12/12 at 100.00 AAA $ 7,716,123
Development Authority, Revenue Bonds, Baton Rouge Community
College Facilities Corporation, Series 2002, 5.000%, 12/01/32
- MBIA Insured
3,350 Louisiana Public Facilities Authority, Revenue Bonds, Baton Rouge 7/14 at 100.00 AAA 3,579,475
General Hospital, Series 2004, 5.250%, 7/01/33 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
10,765 Total Louisiana 11,295,598
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.3% (0.3% OF TOTAL INVESTMENTS)
2,500 Maryland Department of Transportation, Consolidated Transportation No Opt. Call AA 2,848,150
Revenue Bonds, Series 2002, 5.500%, 2/01/16
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 4.5% (2.9% OF TOTAL INVESTMENTS)
1,100 Massachusetts Bay Transportation Authority, Assessment Bonds, 7/10 at 100.00 AAA 1,155,594
Series 2000A, 5.250%, 7/01/30
4,150 Massachusetts Bay Transportation Authority, Assessment Bonds, 7/10 at 100.00 AAA 4,391,073
Series 2000A, 5.250%, 7/01/30 (Pre-refunded 7/01/10)
8,315 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102.00 AAA 8,495,186
Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA
Insured
10,000 Massachusetts Water Resources Authority, General Revenue Bonds, 8/10 at 101.00 AAA 10,825,600
Series 2000A, 5.750%, 8/01/39 (Pre-refunded 8/01/10) - FGIC
Insured
6,195 University of Massachusetts Building Authority, Facilities Revenue 11/10 at 100.00 AAA 6,557,036
Bonds, Senior Series 2000A, 5.125%, 11/01/25
(Pre-refunded 11/01/10) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
29,760 Total Massachusetts 31,424,489
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.0% (0.7% OF TOTAL INVESTMENTS)
5,000 Detroit Water Supply System, Michigan, Water Supply System Revenue 7/16 at 100.00 AAA 5,050,200
Bonds, Series 2006D, 4.625%, 7/01/32 - FSA Insured
2,090 Grand Rapids Building Authority, Kent County, Michigan, Limited 8/10 at 100.00 AAA 2,215,546
Tax General Obligation Bonds, Series 2000, 5.375%, 8/01/17 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
7,090 Total Michigan 7,265,746
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 7.7% (5.1% OF TOTAL INVESTMENTS)
930 Minnesota Agricultural and Economic Development Board, Healthcare 11/10 at 101.00 A 1,011,003
System Revenue Bonds, Fairview Hospital and Healthcare Services,
Series 2000A, 6.375%, 11/15/29
29,070 Minnesota Agricultural and Economic Development Board, Healthcare 11/10 at 101.00 A(4) 32,316,827
System Revenue Bonds, Fairview Hospital and Healthcare Services,
Series 2000A, 6.375%, 11/15/29 (Pre-refunded 11/15/10)
2,420 Minnesota Housing Finance Agency, Single Family Remarketed 1/11 at 101.00 AA+ 2,440,449
Mortgage Bonds, Series 1998H-2, 6.050%, 7/01/31 (Alternative
Minimum Tax)
13,675 Minnesota, General Obligation Bonds, Series 2000, 5.125%, 11/01/16 11/10 at 100.00 AAA 14,440,253
3,130 St. Paul Housing and Redevelopment Authority, Minnesota, Sales Tax 11/15 at 103.00 AAA 3,890,277
Revenue Refunding Bonds, Civic Center Project, Series 1996,
7.100%, 11/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
49,225 Total Minnesota 54,098,809
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.0% (0.7% OF TOTAL INVESTMENTS)
5,900 Mississippi Business Finance Corporation, Pollution Control 4/07 at 100.00 BBB- 5,918,349
Revenue Refunding Bonds, System Energy Resources Inc. Project,
Series 1998, 5.875%, 4/01/22
1,090 Mississippi Home Corporation, GNMA Mortgage-Backed Securities 7/07 at 105.00 Aaa 1,102,884
Program Single Family Mortgage Revenue Bonds, Series 1997D-5,
6.750%, 7/01/29 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
6,990 Total Mississippi 7,021,233
------------------------------------------------------------------------------------------------------------------------------------
48
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.7% (0.4% OF TOTAL INVESTMENTS)
Kansas City Municipal Assistance Corporation, Missouri, Leasehold
Revenue Bonds,Series 2004B-1:
$ 7,000 0.000%, 4/15/27 - AMBAC Insured No Opt. Call AAA $ 2,868,040
5,000 0.000%, 4/15/31 - AMBAC Insured No Opt. Call AAA 1,720,600
------------------------------------------------------------------------------------------------------------------------------------
12,000 Total Missouri 4,588,640
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 4.6% (3.0% OF TOTAL INVESTMENTS)
Director of Nevada State Department of Business and Industry,
Revenue Bonds, Las Vegas Monorail Project, First Tier,
Series 2000:
6,125 0.000%, 1/01/17 - AMBAC Insured No Opt. Call AAA 3,994,112
8,500 0.000%, 1/01/26 - AMBAC Insured No Opt. Call AAA 3,622,360
5,315 0.000%, 1/01/27 - AMBAC Insured No Opt. Call AAA 2,162,195
21,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 21,887,670
2,135 Reno, Nevada, Capital Improvement Revenue Bonds, Series 2005B, 6/15 at 33.61 AAA 465,046
0.000%, 6/01/37 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
43,075 Total Nevada 32,131,383
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 6.3% (4.1% OF TOTAL INVESTMENTS)
170 Camden County Pollution Control Financing Authority, New Jersey, 12/06 at 100.00 Baa3 172,370
Solid Waste Disposal and Resource Recovery System Revenue Bonds,
Series 1991D, 7.250%, 12/01/10
18,000 New Jersey Transportation Trust Fund Authority, Transportation 6/10 at 100.00 AAA 19,344,780
System Bonds, Series 2000B, 5.750%, 6/15/17
(Pre-refunded 6/15/10)
35,000 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 10,377,500
System Bonds, Series 2006C, 0.000%, 12/15/34 - FSA Insured
5,000 New Jersey Turnpike Authority, Revenue Bonds, Growth and Income 1/17 at 100.00 AAA 3,536,600
Securities, Series 2004B, 0.000%, 1/01/35 - AMBAC Insured
3,000 Rahway Valley Sewerage Authority, New Jersey, Sewer Revenue Bonds, No Opt. Call Aaa 1,343,820
Series 2005A, 0.000%, 9/01/25 - MBIA Insured
3,475 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 BBB 3,773,224
Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/42
Tobacco Settlement Financing Corporation, New Jersey, Tobacco
Settlement Asset-Backed Bonds, Series 2003:
2,100 6.375%, 6/01/32 6/13 at 100.00 BBB 2,337,909
2,925 6.750%, 6/01/39 6/13 at 100.00 BBB 3,338,273
------------------------------------------------------------------------------------------------------------------------------------
69,670 Total New Jersey 44,224,476
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 1.8% (1.2% OF TOTAL INVESTMENTS)
5,925 New Mexico Hospital Equipment Loan Council, Hospital Revenue 8/11 at 101.00 AA-(4) 6,447,229
Bonds, Presbyterian Healthcare Services, Series 2001A, 5.500%,
8/01/21 (Pre-refunded 8/01/11)
5,675 University of New Mexico, Revenue Refunding Bonds, Series 1992A, No Opt. Call AA 6,176,330
6.250%, 6/01/12
------------------------------------------------------------------------------------------------------------------------------------
11,600 Total New Mexico 12,623,559
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 14.5% (9.5% OF TOTAL INVESTMENTS)
245 Dormitory Authority of the State of New York, Improvement Revenue 2/07 at 102.00 AA- 251,179
Bonds, Mental Health Services Facilities, Series 1997A, 5.750%,
2/15/27
Dormitory Authority of the State of New York, Improvement Revenue
Bonds, Mental Health Services Facilities, Series 1997A:
465 5.750%, 2/15/27 (Pre-refunded 2/15/07) 2/07 at 102.00 AA-(4) 477,178
19,290 5.750%, 2/15/27 (Pre-refunded 2/15/07) 2/07 at 102.00 AA-(4) 19,795,205
3,000 Long Island Power Authority, New York, Electric System General 6/16 at 100.00 A- 3,164,610
Revenue Bonds, Series 2006B, 5.000%, 12/01/35
6,750 Nassau County Tobacco Settlement Corporation, New York, Tobacco 7/09 at 101.00 AAA 7,301,003
Settlement Asset-Backed Bonds, Series 1999A, 6.400%, 7/15/33
(Pre-refunded 7/15/09)
17,870 New York City Transitional Finance Authority, New York, Future Tax 8/09 at 101.00 AAA 19,103,030
Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24
(Pre-refunded 8/15/09)
49
Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
$ 630 New York City, New York, General Obligation Bonds, Fiscal Series 8/07 at 101.00 AA- $ 647,142
1997H, 6.125%, 8/01/25
9,370 New York City, New York, General Obligation Bonds, Fiscal Series 8/07 at 101.00 AA-(4) 9,643,417
1997H, 6.125%, 8/01/25 (Pre-refunded 8/01/07)
New York City, New York, General Obligation Bonds, Fiscal Series
2002G:
1,000 5.000%, 8/01/17 8/12 at 100.00 AA- 1,055,850
6,530 5.750%, 8/01/18 8/12 at 100.00 AA- 7,157,011
5,000 New York City, New York, General Obligation Bonds, Fiscal Series 8/12 at 100.00 AA- 5,507,150
2003A, 5.750%, 8/01/16
7,805 New York State Power Authority, General Revenue Bonds, Series 11/12 at 100.00 Aa2 8,306,081
2002A, 5.000%, 11/15/21
10,000 Port Authority of New York and New Jersey, Special Project Bonds, 12/07 at 102.00 AAA 10,411,400
JFK International Air Terminal LLC, Sixth Series 1997, 5.750%,
12/01/22 - MBIA Insured (Alternative Minimum Tax)
8,000 TSASC Inc., New York, Tobacco Flexible Amortization Bonds, Series 7/09 at 101.00 AAA 8,623,680
1999-1, 6.250%, 7/15/34 (Mandatory put 7/15/24)
(Pre-refunded 7/15/09)
------------------------------------------------------------------------------------------------------------------------------------
95,955 Total New York 101,443,936
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.4% (0.9% OF TOTAL INVESTMENTS)
1,900 Charlotte-Mecklenburg Hospital Authority, North Carolina, 1/15 at 100.00 AA 1,980,085
Healthcare System Revenue Bonds, DBA Carolinas Healthcare
System, Series 2005A, 5.000%, 1/15/45
7,500 North Carolina Municipal Power Agency 1, Catawba Electric Revenue 1/13 at 100.00 AAA 8,086,050
Bonds, Series 2003A, 5.250%, 1/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
9,400 Total North Carolina 10,066,135
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 4.2% (2.8% OF TOTAL INVESTMENTS)
22,905 Fargo, North Dakota, Health System Revenue Bonds, MeritCare 6/10 at 101.00 AAA 24,468,494
Obligated Group, Series 2000A, 5.625%, 6/01/31 - FSA Insured
North Dakota Water Commission, Water Development and Management
Program Bonds, Series 2000A:
2,230 5.700%, 8/01/18 (Pre-refunded 8/01/10) - MBIA Insured 8/10 at 100.00 AAA 2,397,228
2,450 5.750%, 8/01/19 (Pre-refunded 8/01/10) - MBIA Insured 8/10 at 100.00 AAA 2,637,989
------------------------------------------------------------------------------------------------------------------------------------
27,585 Total North Dakota 29,503,711
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 3.0% (2.0% OF TOTAL INVESTMENTS)
3,335 Columbus City School District, Franklin County, Ohio, General 12/16 at 100.00 AAA 3,110,855
Obligation Bonds, Series 2006, Drivers 1488, 5.077%, 12/01/32 -
FSA Insured (IF)
16,140 Montgomery County, Ohio, Hospital Facilities Revenue Bonds, No Opt. Call A 17,933,638
Kettering Medical Center, Series 1999, 6.300%, 4/01/12
------------------------------------------------------------------------------------------------------------------------------------
19,475 Total Ohio 21,044,493
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.0% (0.0% OF TOTAL INVESTMENTS)
300 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding Bonds, 6/09 at 100.00 B 304,548
American Airlines Inc., Series 2000B, 6.000%, 6/01/35 (Mandatory
put 12/01/08) (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 2.4% (1.6% OF TOTAL INVESTMENTS)
5,000 Oregon Health Sciences University, Revenue Bonds, Series 2002A, 1/13 at 100.00 AAA 5,386,400
5.250%, 7/01/22 - MBIA Insured
Portland, Oregon, Water System Revenue Bonds, Series 2000A:
6,780 5.375%, 8/01/18 (Pre-refunded 8/01/10) 8/10 at 100.00 Aa1 (4) 7,214,191
3,880 5.500%, 8/01/20 (Pre-refunded 8/01/10) 8/10 at 100.00 Aa1 (4) 4,145,353
------------------------------------------------------------------------------------------------------------------------------------
15,660 Total Oregon 16,745,944
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.8% (2.5% OF TOTAL INVESTMENTS)
5,000 Delaware County Industrial Development Authority, Pennsylvania, 1/08 at 102.00 BB+ 5,140,900
Resource Recovery Revenue Refunding Bonds, Series 1997A, 6.200%,
7/01/19
5,000 Pennsylvania Higher Education Assistance Agency, Capital 12/10 at 100.00 AAA 5,441,900
Acquisition Revenue Bonds, Series 2000, 5.875%, 12/15/30
(Pre-refunded 12/15/10) - MBIA Insured
15,050 Pennsylvania, General Obligation Bonds, Second Series 2001, 9/11 at 101.00 AA 16,086,794
5.000%, 9/15/14
------------------------------------------------------------------------------------------------------------------------------------
25,050 Total Pennsylvania 26,669,594
------------------------------------------------------------------------------------------------------------------------------------
50
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 2.9% (1.9% OF TOTAL INVESTMENTS)
$ 12,500 Puerto Rico Housing Finance Authority, Capital Fund Program No Opt. Call AA $ 12,647,000
Revenue Bonds, Series 2003, 4.500%, 12/01/23
7,500 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 7,880,325
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
20,000 Total Puerto Rico 20,527,325
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 7.5% (4.9% OF TOTAL INVESTMENTS)
24,730 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA-(4) 27,438,923
Purchase Revenue Bonds, Series 2002, 5.500%, 12/01/22
(Pre-refunded 12/01/12)
21,570 Piedmont Municipal Power Agency, South Carolina, Electric Revenue No Opt. Call AAA 7,710,844
Bonds, Series 2004A-2, 0.000%, 1/01/30 - AMBAC Insured
3,560 South Carolina Public Service Authority, Revenue Refunding Bonds, 7/13 at 100.00 AAA 3,803,931
Santee Cooper Electric System, Series 2003A, 5.000%,
1/01/20 - AMBAC Insured
1,045 Three Rivers Solid Waste Authority, South Carolina, Solid Waste 1/07 at 102.00 AAA 1,068,272
Disposal Facilities Revenue Bonds, Series 1997, 5.300%,
1/01/27 - MBIA Insured
11,665 Tobacco Settlement Revenue Management Authority, South Carolina, 5/11 at 101.00 BBB 12,663,407
Tobacco Settlement Asset-Backed Bonds, Series 2001B,
6.375%, 5/15/28
------------------------------------------------------------------------------------------------------------------------------------
62,570 Total South Carolina 52,685,377
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.7% (0.5% OF TOTAL INVESTMENTS)
5,000 Knox County Health, Educational and Housing Facilities Board, 7/13 at 100.00 AA 5,208,050
Tennessee, Hospital Revenue Bonds, East Tennessee Children's
Hospital, Series 2003A, 5.000%, 7/01/23 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 25.5% (16.8% OF TOTAL INVESTMENTS)
5,000 Alliance Airport Authority, Texas, Special Facilities Revenue 12/06 at 100.00 CCC+ 5,100,000
Bonds, American Airlines Inc., Series 1990, 7.500%, 12/01/29
(Alternative Minimum Tax)
12,250 Austin, Texas, Subordinate Lien Hotel Occupancy Tax Revenue 11/09 at 100.00 AAA 13,034,613
Refunding Bonds, Series 1999, 5.800%, 11/15/29
(Pre-refunded 11/15/09) - AMBAC Insured
11,255 Brazos River Authority, Texas, Pollution Control Revenue Refunding No Opt. Call Baa2 11,975,995
Bonds, TXU Electric Company, Series 2001C, 5.750%, 5/01/36
(Mandatory put 11/01/11) (Alternative Minimum Tax)
Brownsville Independent School District, Cameron County, Texas,
General Obligation Bonds, Series 1999:
5,015 5.625%, 8/15/25 (Pre-refunded 8/15/09) 8/09 at 100.00 AAA 5,281,898
8,825 5.625%, 8/15/29 (Pre-refunded 8/15/09) 8/09 at 100.00 AAA 9,294,667
1,000 Cedar Hill Independent School District, Dallas County, Texas, No Opt. Call AAA 321,410
General Obligation Bonds, Series 2002, 0.000%, 8/15/32 - FGIC
Insured
15,000 Central Texas Regional Mobility Authority, Travis and Williamson 1/15 at 100.00 AAA 15,626,700
Counties, Toll Road Revenue Bonds, Series 2005, 5.000%,
1/01/45 - FGIC Insured
Clear Creek Independent School District, Galveston and Harris
Counties, Texas, Unlimited Tax Schoolhouse and Refunding Bonds,
Series 2000:
585 5.400%, 2/15/18 2/10 at 100.00 AAA 615,847
340 5.650%, 2/15/19 2/10 at 100.00 AAA 360,713
235 5.700%, 2/15/20 2/10 at 100.00 AAA 249,676
270 5.700%, 2/15/21 2/10 at 100.00 AAA 286,862
Clear Creek Independent School District, Galveston and
Harris Counties, Texas, Unlimited Tax Schoolhouse and
Refunding Bonds, Series 2000:
16,740 5.400%, 2/15/18 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 17,695,017
9,660 5.650%, 2/15/19 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 10,285,485
6,645 5.700%, 2/15/20 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 7,085,497
7,750 5.700%, 2/15/21 (Pre-refunded 2/15/10) 2/10 at 100.00 AAA 8,263,748
2,500 Comal Independent School District, Comal, Bexar, Guadalupe, Hays, No Opt. Call Aaa 1,238,400
and Kendall Counties, Texas, General Obligation Bonds, Series
2005A, 0.000%, 2/01/23
6,000 Dallas-Ft. Worth International Airport Facility Improvement 11/09 at 101.00 CCC+ 6,157,620
Corporation, Texas, Revenue Bonds, American Airlines Inc.,
Series 1999, 6.375%, 5/01/35 (Alternative Minimum Tax)
51
Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 11,750 Dallas-Ft. Worth International Airport Facility Improvement 11/07 at 100.00 CCC+ $ 11,839,183
Corporation, Texas, Revenue Refunding Bonds, American Airlines
Inc., Series 2000C, 6.150%, 5/01/29 (Mandatory put
11/01/07) (Alternative Minimum Tax)
Ennis Independent School District, Ellis County, Texas, General
Obligation Bonds, Series 2006:
3,950 0.000%, 8/15/30 8/16 at 49.21 Aaa 1,231,097
4,000 0.000%, 8/15/31 8/16 at 46.64 Aaa 1,178,240
1,440 Houston, Texas, Hotel Occupancy Tax and Special Revenue Bonds, No Opt. Call AAA 461,938
Convention and Entertainment Project, Series 2001B, 0.000%,
9/01/32 - AMBAC Insured
1,250 Houston, Texas, Junior Lien Water and Sewerage System Revenue 12/11 at 100.00 AAA 1,321,963
Refunding Bonds, Series 2001A, 5.000%, 12/01/20 - FSA Insured
21,500 Houston, Texas, Subordinate Lien Airport System Revenue Bonds, 7/10 at 100.00 AAA 22,776,670
Series 2000B, 5.500%, 7/01/30 - FSA Insured
9,350 Leander Independent School District, Williamson and Travis 8/15 at 39.49 AAA 2,461,201
Counties, Texas, General Obligation Bonds, Series 2005, 0.000%,
8/15/32 - FGIC Insured
6,000 Leander Independent School District, Williamson and Travis 8/14 at 35.27 AAA 1,471,680
Counties, Texas, General Obligation Bonds, Series 2006, 0.000%,
8/15/33
15,000 San Antonio Independent School District, Bexar County, Texas, 8/09 at 100.00 AAA 15,886,950
General Obligation Bonds, Series 1999, 5.800%, 8/15/29
(Pre-refunded 8/15/09)
5,000 White Settlement Independent School District, Tarrant County, 8/15 at 36.81 AAA 1,225,550
Texas, General Obligation Bonds, Series 2005, 0.000%, 8/15/34
3,970 Wichita Falls, Wichita County, Texas, Priority Lien Water and 8/11 at 100.00 AAA 4,184,737
Sewerage System Revenue Bonds, Series 2001, 5.000%,
8/01/21 - AMBAC Insured
Wylie Independent School District, Taylor County, Texas, General
Obligation Bonds, Series 2005:
3,000 0.000%, 8/15/23 8/15 at 67.10 AAA 1,366,080
2,000 0.000%, 8/15/24 8/15 at 63.56 AAA 857,440
------------------------------------------------------------------------------------------------------------------------------------
197,280 Total Texas 179,136,877
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 17.6% (11.6% OF TOTAL INVESTMENTS)
5,500 Clark County Public Utility District 1, Washington, Generating 1/11 at 100.00 AAA 5,729,405
System Revenue Refunding Bonds, Series 2000, 5.125%,
1/01/20 - FSA Insured
2,755 Cowlitz County, Washington, Special Sewerage Revenue Refunding No Opt. Call AAA 3,123,233
Bonds, CSOB Wastewater Treatment Facilities, Series 2002,
5.500%, 11/01/16 - FGIC Insured
10,000 Energy Northwest, Washington, Electric Revenue Refunding Bonds, 7/11 at 101.00 AAA 10,864,400
Nuclear Project 3, Series 2001A, 5.500%, 7/01/17 - FSA Insured
2,500 King County, Washington, Sewer Revenue Bonds, Series 2001, 1/12 at 100.00 AAA 2,628,625
5.000%, 1/01/23 - FGIC Insured
33,490 Port of Seattle, Washington, Revenue Bonds, Series 2000A, 5.625%, 8/10 at 100.00 AAA 35,853,053
2/01/30 (Pre-refunded 8/01/10) - MBIA Insured
6,950 Port of Seattle, Washington, Revenue Bonds, Series 2000B, 5.625%, 8/10 at 100.00 AAA 7,347,887
2/01/24 - MBIA Insured (Alternative Minimum Tax)
Seattle, Washington, General Obligation Refunding and Improvement
Bonds, Series 2002:
6,165 4.400%, 12/01/19 12/12 at 100.00 AAA 6,307,535
6,445 4.500%, 12/01/20 12/12 at 100.00 AAA 6,615,535
3,000 Spokane County School District 81, Spokane, Washington, General 6/15 at 100.00 AAA 2,844,900
Obligation Bonds, Series 2005, 5.000%, 6/01/24 - MBIA Insured
6,630 Tacoma, Washington, Electric System Revenue Refunding Bonds, 1/11 at 101.00 AAA 7,248,579
Series 2001A, 5.750%, 1/01/17 (Pre-refunded 1/01/11) - FSA
Insured
3,520 Washington State Healthcare Facilities Authority, Revenue Bonds, 10/11 at 100.00 Aaa 3,740,950
Children's Hospital and Regional Medical Center, Series 2001,
5.000%, 10/01/21 (Pre-refunded 10/01/11) - AMBAC Insured
7,890 Washington State Higher Education Facilities Authority, Revenue 11/09 at 101.00 AA 8,417,999
Bonds, Pacific Lutheran University, Series 1999, 5.950%,
11/01/29 - RAAI Insured
12,020 Washington State Tobacco Settlement Authority, Tobacco Settlement 6/13 at 100.00 BBB 13,365,278
Asset-Backed Revenue Bonds, Series 2002, 6.500%, 6/01/26
52
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
$ 9,000 Washington, Motor Vehicle Fuel Tax General Obligation Bonds, 1/12 at 100.00 AAA $ 9,512,640
Series 2002C, 5.000%, 1/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
115,865 Total Washington 123,600,019
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 1.1% (0.7% OF TOTAL INVESTMENTS)
4,030 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 4,357,196
Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%,
6/01/27
1,755 Wisconsin Health and Educational Facilities Authority, Revenue 5/16 at 100.00 BBB 1,763,670
Bonds, Divine Savior Healthcare, Series 2006, 4.750%, 5/01/25
1,250 Wisconsin Health and Educational Facilities Authority, Revenue 3/08 at 101.00 N/R 1,257,600
Bonds, United Lutheran Program for the Aging Inc., Series 1998,
5.700%, 3/01/28
------------------------------------------------------------------------------------------------------------------------------------
7,035 Total Wisconsin 7,378,466
------------------------------------------------------------------------------------------------------------------------------------
WYOMING - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,800 Jackson National Rural Utilities Cooperative Financing 5/07 at 101.00 A 2,849,392
Corporation, Wyoming, Guaranteed Gas Supply Revenue Bonds,
Lower Valley Power and Light Inc., Series 1997B, 5.875%,
5/01/26 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
$ 1,215,233 Total Municipal Bonds (cost $991,222,192) 1,067,173,259
============------------------------------------------------------------------------------------------------------------------------
SHARES DESCRIPTION (1) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 0.0% (0.0% OF TOTAL INVESTMENTS)
AIRLINES - 0.0% (0.0% OF TOTAL INVESTMENTS)
1,527 UAL Corporation (5) (7) 54,880
------------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (cost $48,000) 54,880
---------------------------------------------------------------------------------------------------------------------
Total Investments (cost $991,270,192) - 152.1% 1,067,228,139
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.1% 14,331,122
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (54.2)% (380,000,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 701,559,261
=====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's or Moody's
rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's
Investor Service, Inc. are considered to be below investment grade. The
ratings shown for inverse floating rate investments represent those of
the underlying bonds and not the inverse floating rate investments
themselves. Inverse floating rate investments likely present greater
credit risk to the holders of such investments than to those holders of
the underlying bonds.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
(5) Non-income producing.
(6) On December 9, 2002, UAL Corporation ("UAL"), the holding company of
United Air Lines, Inc., filed for federal bankruptcy protection. The
Adviser determined that it was likely United would not remain current on
their interest payment obligations with respect to the bonds previously
held and thus the Fund had stopped accruing interest on its UAL bonds.
(7) On February 1, 2006, UAL emerged from federal bankruptcy with the
acceptance of its reorganization plan by the bankruptcy court. Under the
settlement agreement established to meet UAL's unsecured bond
obligations, the bondholders, including the Fund, received distributions
of UAL common stock over the subsequent months, and the bankruptcy court
dismissed all unsecured claims of bondholders, including those of the
Fund. On April 13, 2006 and May 4, 2006, the Fund liquidated such UAL
common stock holdings. On October 5, 2006, the Fund received an
additional distribution of UAL common stock as a result of its ownership
of UAL bonds, which it still held at October 31, 2006. Subsequent to
fiscal year-end, the Fund liquidated its UAL common stock holdings.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
53
Nuveen Dividend Advantage Municipal Fund (NAD)
Portfolio of
INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 0.3% (0.2% OF TOTAL INVESTMENTS)
$ 1,500 Alabama 21st Century Authority, Tobacco Settlement Revenue Bonds, 6/10 at 102.00 A- $ 1,581,555
Series 2000, 5.750%, 12/01/20
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.1% (0.1% OF TOTAL INVESTMENTS)
750 Alaska Housing Finance Corporation, General Housing Purpose Bonds, 12/14 at 100.00 AAA 804,810
Series 2005A, 5.250%, 12/01/34 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 2.7% (1.9% OF TOTAL INVESTMENTS)
1,535 Alameda Corridor Transportation Authority, California, Senior Lien No Opt. Call AAA 386,620
Revenue Bonds, Series 1999A, 0.000%, 10/01/37 - MBIA Insured
5,500 Anaheim Public Finance Authority, California, Subordinate Lease No Opt. Call AAA 2,113,870
Revenue Bonds, Public Improvement Project, Series 1997C, 0.000%,
9/01/28 - FSA Insured
200 California, General Obligation Bonds, Series 1997, 5.000%, 10/07 at 101.00 AAA 204,296
10/01/18 - AMBAC Insured
California, General Obligation Bonds, Series 1997:
2,195 5.000%, 10/01/18 (Pre-refunded 10/01/07) - AMBAC Insured 10/07 at 101.00 AAA 2,247,351
210 5.000%, 10/01/18 (Pre-refunded 10/01/07) - AMBAC Insured 10/07 at 101.00 AAA 215,009
5,000 California, General Obligation Bonds, Series 2005, 5.000%, 3/01/31 3/16 at 100.00 A+ 5,296,050
3,500 Golden State Tobacco Securitization Corporation, California, No Opt. Call AAA 1,480,815
Tobacco Settlement Asset-Backed
17,000 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AAA 4,765,950
California, Toll Road Revenue Refunding Bonds, Series 1997A,
0.000%, 1/15/35 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
35,140 Total California 16,709,961
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 1.9% (1.3% OF TOTAL INVESTMENTS)
3,205 Denver City and County, Colorado, Airport Special Facilities 1/09 at 101.00 AAA 3,368,711
Revenue Bonds, Rental Car Projects, Series 1999A, 6.000%,
1/01/12 - MBIA Insured (Alternative Minimum Tax)
2,950 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA 3,192,313
Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%,
12/01/22 (Pre-refunded 12/01/13) - XLCA Insured
1,475 Denver, Colorado, FHA-Insured Multifamily Housing Revenue Bonds, 10/07 at 102.00 AAA 1,513,660
Boston Lofts Project, Series 1997A, 5.750%, 10/01/27
(Alternative Minimum Tax)
8,515 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AAA 3,730,762
Series 1997B, 0.000%, 9/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
16,145 Total Colorado 11,805,446
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,700 Connecticut Development Authority, Health Facilities Revenue 2/07 at 100.00 N/R 2,709,693
Refunding Bonds, Alzheimer's Resource Center of Connecticut
Inc., Series 1994A, 7.125%, 8/15/14
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.8% (0.6% OF TOTAL INVESTMENTS)
5,000 Washington Convention Center Authority, District of Columbia, 10/08 at 101.00 AAA 5,186,700
Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 5.250%,
10/01/13 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 7.5% (5.3% OF TOTAL INVESTMENTS)
1,630 Florida Housing Finance Agency, Housing Revenue Bonds, Mar Lago 12/07 at 102.00 AAA 1,679,177
Village Apartments, Series 1997F, 5.800%, 12/01/17 - AMBAC
Insured (Alternative Minimum Tax)
54
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA (continued)
$ 15,000 Florida State Board of Education, Public Education Capital Outlay 6/15 at 101.00 AAA $ 15,051,600
Bonds, Series 2005E, 4.500%, 6/01/35
14,350 JEA St. John's River Power Park System, Florida, Revenue 10/11 at 100.00 Aa2 15,361,101
Refunding Bonds, Issue 2, Series 2002-17, 5.250%, 10/01/13
13,625 Martin County Industrial Development Authority, Florida, 12/06 at 100.00 BB+ 13,675,140
Industrial Development Revenue Bonds, Indiantown
Cogeneration LP, Series 1994A, 7.875%, 12/15/25
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
44,605 Total Florida 45,767,018
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 1.3% (0.9% OF TOTAL INVESTMENTS)
4,000 Forsyth County Water and Sewerage Authority, Georgia, Revenue 4/10 at 101.00 AA (4) 4,351,400
Bonds, Series 2000, 6.000%,4/01/25 (Pre-refunded 4/01/10)
880 Gainesville and Hall County Hospital Authority, Georgia, 5/09 at 101.00 AAA 924,519
Revenue Anticipation Certificates, Northeast Georgia Health
Services Inc., Series 1999, 5.500%, 5/15/29 - MBIA Insured
2,620 Gainesville and Hall County Hospital Authority, 5/09 at 101.00 AAA 2,769,209
Georgia, Revenue Anticipation Certificates, Northeast Georgia
Health Services Inc., Series 1999, 5.500%, 5/15/29
(Pre-refunded 5/15/09) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
7,500 Total Georgia 8,045,128
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.2% (0.1% OF TOTAL INVESTMENTS)
265 Idaho Housing and Finance Association, Single Family 7/09 at 101.00 Aa2 269,359
Mortgage Bonds, Series 1999E, 5.750%, 1/01/21
(Alternative Minimum Tax)
320 Idaho Housing and Finance Association, Single Family Mortgage 1/10 at 100.00 Aa2 330,701
Bonds, Series 2000D, 6.350%, 7/01/22 (Alternative Minimum Tax)
470 Idaho Housing and Finance Association, Single Family 7/10 at 100.00 Aaa 478,596
Mortgage Bonds, Series 2000E, 5.950%, 7/01/20
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,055 Total Idaho 1,078,656
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 34.5% (23.7% OF TOTAL INVESTMENTS)
3,265 Channahon, Illinois, Revenue Refunding Bonds, Morris Hospital, 12/09 at 102.00 BBB+ 3,413,166
Series 1999, 5.750%, 12/01/12
7,250 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 8,624,093
Obligation Bonds, Dedicated Tax Revenues, Series 1999A,
5.500%, 12/01/26 - FGIC Insured
Chicago, Illinois, FHA/GNMA Multifamily Housing Revenue Bonds,
Archer Court Apartments, Series 1999A:
830 5.500%, 12/20/19 (Alternative Minimum Tax) 10/10 at 101.00 AAA 866,014
1,210 5.600%, 12/20/29 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,249,470
1,925 5.650%, 12/20/40 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,982,577
22,750 Chicago, Illinois, General Obligation Refunding Bonds, No Opt. Call AAA 26,678,467
Emergency Telephone System, Series 1999, 5.500%,
1/01/23 - FGIC Insured
2,620 Chicago, Illinois, Motor Fuel Tax Revenue Refunding Bonds, No Opt. Call AAA 2,887,843
Series 1993, 5.375%, 1/01/14 - AMBAC Insured
3,340 Chicago, Illinois, Third Lien General Airport Revenue Bonds, 1/16 at 100.00 AAA 3,527,040
O'Hare International Airport, Series 2005A,
5.000%, 1/01/33 - FGIC Insured
1,145 Chicago, Illinois, Wastewater Transmission Revenue Bonds, 1/08 at 100.00 AAA 1,161,568
Series 1995, 5.125%, 1/01/25 - FGIC Insured
190 DuPage County Community School District 200, Wheaton, 11/13 at 100.00 Aaa 206,612
Illinois, General Obligation Bonds, Series 2003B,
5.250%, 11/01/20 - FSA Insured
810 DuPage County Community School District 200, Wheaton, 11/13 at 100.00 Aaa 890,579
Illinois, General Obligation Bonds, Series 2003B,
5.250%, 11/01/20 (Pre-refunded 11/01/13) - FSA Insured
500 Hoffman Estates Park District, Cook County, Illinois, 12/09 at 102.00 AAA 532,505
General Obligation Bonds, Series 1999,
5.375%, 12/01/29 - MBIA Insured
3,935 Illinois Development Finance Authority, Local Government No Opt. Call Aaa 2,854,410
Program Revenue Bonds, Lake County School District 116 -
Round Lake, Series 1999, 0.000%, 1/01/15 - MBIA Insured
55
Nuveen Dividend Advantage Municipal Fund (NAD) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 24,835 Illinois Development Finance Authority, Revenue Bonds, 9/07 at 102.00 AAA $ 25,710,434
Presbyterian Home of Lake Forest, Series 1999,
5.625%, 9/01/31 - FSA Insured
5,570 Illinois Finance Authority, Revenue Bonds, University of Chicago, 7/14 at 100.00 Aa1 5,838,697
Series 2004A, 5.000%, 7/01/34
17,280 Illinois Health Facilities Authority, Converted Adjustable 10/07 at 102.00 AAA 17,991,763
Rate Revenue Bonds, Highland Park Hospital, Series 1991A,
6.000%, 10/01/15 (Pre-refunded 10/01/07) - FGIC Insured
9,880 Illinois Health Facilities Authority, Remarketed Revenue Bonds, 8/11 at 103.00 Aa1 10,767,026
University of Chicago Project, Series 1985A, 5.500%, 8/01/20
5,400 Illinois Health Facilities Authority, Revenue Bonds, 7/07 at 101.00 AAA 5,487,858
Loyola University Health System, Series 1997A,
5.000%, 7/01/24 - MBIA Insured
5,490 Illinois Health Facilities Authority, Revenue Bonds, 2/07 at 102.00 A 5,617,972
Sarah Bush Lincoln Health Center, Series 1996B, 5.500%, 2/15/16
1,500 Illinois Housing Development Authority, Housing Finance Bonds, 1/15 at 100.00 AAA 1,526,790
Series 2005E, 4.800%, 1/01/36 - FGIC Insured
11,345 Lake and McHenry Counties Community Unit School District 118, 1/15 at 60.14 Aaa 4,717,478
Wauconda, Illinois, General Obligation Bonds, Series 2005B,
0.000%, 1/01/25 - FSA Insured
3,000 Lombard Public Facilities Corporation, Illinois, 1/16 at 100.00 N/R 3,226,890
First Tier Conference Center and Hotel Revenue Bonds,
Series 2005A-1, 7.125%, 1/01/36
22,500 Metropolitan Pier and Exposition Authority, Illinois, 12/09 at 101.00 AAA 23,863,050
Revenue Bonds, McCormick Place Expansion Project,
Series 1999A, 5.500%, 12/15/24 - FGIC Insured
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Refunding Bonds, McCormick Place Expansion Project, Series 1996A:
9,750 0.000%, 12/15/22 - MBIA Insured No Opt. Call AAA 4,887,188
13,000 0.000%, 12/15/23 - MBIA Insured No Opt. Call AAA 6,222,190
Regional Transportation Authority, Cook, DuPage, Kane,
Lake, McHenry and Will Counties, Illinois, General
Obligation Bonds, Series 1999:
22,650 5.750%, 6/01/19 - FSA Insured No Opt. Call AAA 26,648,858
3,500 5.750%, 6/01/23 - FSA Insured No Opt. Call AAA 4,223,835
1,300 Schaumburg, Illinois, General Obligation Bonds, Series 2004B, 12/14 at 100.00 AAA 1,403,324
5.250%, 12/01/34 - FGIC Insured
10,000 Will County Community High School District 210 Lincoln-Way, No Opt. Call Aaa 4,955,700
Illinois, General Obligation Bonds, Series 2006,
0.000%, 1/01/23 - FSA Insured
4,500 Will County School District 122, New Lenox, Illinois, General No Opt. Call Aaa 2,729,520
Obligation Bonds, Series 2000B, 0.000%, 11/01/18 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
221,270 Total Illinois 210,692,917
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.7% (2.5% OF TOTAL INVESTMENTS)
8,755 Indiana Health Facility Financing Authority, Hospital Revenue 11/09 at 101.00 AAA 9,306,915
Bonds, Charity Obligated Group, Series 1999D, 5.500%,
11/15/24 (Pre-refunded 11/15/09) - MBIA Insured
8,000 Indiana Health Facility Financing Authority, Hospital 8/10 at 101.50 AAA 8,630,800
Revenue Bonds, Clarian Health Obligated Group, Series 2000A,
5.500%, 2/15/26 (Pre-refunded 8/15/10) - MBIA Insured
4,190 Indianapolis, Indiana, Economic Development Revenue Bonds, 6/09 at 101.00 Aa3 (4) 4,445,967
Park Tudor Foundation Inc., Project, Series 1999, 5.700%,
6/01/24 (Pre-refunded 6/01/09)
------------------------------------------------------------------------------------------------------------------------------------
20,945 Total Indiana 22,383,682
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.2% (0.8% OF TOTAL INVESTMENTS)
7,000 Iowa Tobacco Settlement Authority, Asset Backed Settlement 6/15 at 100.00 BBB 7,440,020
Revenue Bonds, Series 2005C, 5.625%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.8% (0.5% OF TOTAL INVESTMENTS)
3,825 Wichita, Kansas, Water and Sewerage Utility Revenue Bonds, 4/07 at 101.00 AAA 3,831,044
Series 1999, 4.000%, 10/01/18 - FGIC Insured
1,000 Wyandotte County-Kansas City Unified Government, Kansas, Sales 12/15 at 100.00 N/R 1,046,400
Tax Special Obligation Bonds, Redevelopment Project Area B,
Series 2005, 5.000%, 12/01/20
------------------------------------------------------------------------------------------------------------------------------------
4,825 Total Kansas 4,877,444
------------------------------------------------------------------------------------------------------------------------------------
56
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 1.7% (1.2% OF TOTAL INVESTMENTS)
$ 3,030 Hardin County School District Finance Corporation, Kentucky, 2/10 at 101.00 Aa3 (4) $ 3,261,219
School Building Revenue Bonds, Series 2000, 5.750%, 2/01/20
(Pre-refunded 2/01/10)
Kentucky Economic Development Finance Authority, Hospital System
Revenue Refunding and Improvement Bonds, Appalachian
Regional Healthcare Inc., Series 1997:
1,850 5.850%, 10/01/17 4/08 at 102.00 BB- 1,884,799
5,000 5.875%, 10/01/22 4/08 at 102.00 BB- 5,083,050
------------------------------------------------------------------------------------------------------------------------------------
9,880 Total Kentucky 10,229,068
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 4.3% (3.0% OF TOTAL INVESTMENTS)
2,245 Lafayette, Louisiana, Sales Tax Revenue Bonds, Public 5/10 at 101.50 AAA 2,427,765
Improvements, Series 2000B, 5.625%, 5/01/25
(Pre-refunded 5/01/10) - FGIC Insured
1,750 Louisiana Local Government Environmental Facilities and 6/12 at 105.00 Aaa 1,936,743
Community Development Authority, GNMA Collateralized Mortgage
Revenue Refunding Bonds, Sharlo Apartments,
Series 2002A, 6.500%, 6/20/37
5,350 Louisiana Public Facilities Authority, Revenue Bonds, 7/14 at 100.00 AAA 5,716,475
Baton Rouge General Hospital, Series 2004,
5.250%, 7/01/33 - MBIA Insured
1,815 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 1,772,565
Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) -
FGIC Insured (IF)
13,570 Louisiana Transportation Authority, Senior Lien Toll Road 12/10 at 38.73 AAA 4,354,206
Revenue Bonds, Series 2005B, 0.000%, 12/01/28 - AMBAC Insured
9,545 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 10,024,732
Settlement Asset-Backed Bonds, Series 2001B, 5.500%, 5/15/30
------------------------------------------------------------------------------------------------------------------------------------
34,275 Total Louisiana 26,232,486
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 2.3% (1.6% OF TOTAL INVESTMENTS)
1,485 Boston Industrial Development Financing Authority, Massachusetts, 9/12 at 102.00 N/R 1,501,573
Subordinate Revenue Bonds, Crosstown Center Project,
Series 2002, 8.000%, 9/01/35 (Alternative Minimum Tax)
4,365 Massachusetts Health and Educational Facilities Authority, 10/15 at 100.00 AAA 4,685,129
Revenue Bonds, Berkshire Health System, Series 2005F, 5.000%,
10/01/19 - AGC Insured
7,000 Massachusetts Port Authority, Special Facilities Revenue Bonds, 7/07 at 102.00 AAA 7,210,210
BOSFUEL Corporation, Series 1997, 5.500%, 7/01/18 -
MBIA Insured (Alternative Minimum Tax)
785 Massachusetts Port Authority, Special Facilities Revenue Bonds, 3/07 at 102.00 AAA 802,082
US Airways Group Inc., Series 1996A, 5.875%, 9/01/23 -
MBIA Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
13,635 Total Massachusetts 14,198,994
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 3.6% (2.5% OF TOTAL INVESTMENTS)
2,435 Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, 7/11 at 100.00 AAA 2,612,000
Series 2001A, 5.250%, 7/01/33 (Pre-refunded 7/01/11) -
FGIC Insured
15,255 Michigan State Hospital Finance Authority, Hospital Revenue Bonds, 8/08 at 101.00 BB- 15,440,958
Detroit Medical Center Obligated Group, Series 1998A,
5.250%, 8/15/28
4,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 4,153,320
Metropolitan Wayne County Airport, Series 1998A, 5.375%,
12/01/16 - MBIA Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
21,690 Total Michigan 22,206,278
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.2% (0.1% OF TOTAL INVESTMENTS)
1,095 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1/10 at 101.00 AA+ 1,118,291
Series 1998H-1, 5.650%, 7/01/31 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 2.2% (1.5% OF TOTAL INVESTMENTS)
Kansas City Municipal Assistance Corporation, Missouri,
Leasehold Revenue Bonds, Series 2004B-1:
7,000 0.000%, 4/15/27 - AMBAC Insured No Opt. Call AAA 2,868,040
5,000 0.000%, 4/15/29 - AMBAC Insured No Opt. Call AAA 1,877,450
2,185 Missouri Health and Educational Facilities Authority, 6/11 at 101.00 AAA 2,329,734
Revenue Bonds, SSM Healthcare System, Series 2001A, 5.250%,
6/01/21 - AMBAC Insured
57
Nuveen Dividend Advantage Municipal Fund (NAD) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI (continued)
Missouri Health and Educational Facilities Authority,
Revenue Bonds, SSM Healthcare System, Series 2001A:
$ 2,185 5.250%, 6/01/21 (Pre-refunded 6/01/11) - AMBAC Insured 6/11 at 101.00 AAA $ 2,359,866
3,670 5.250%, 6/01/28 (Pre-refunded 6/01/11) - AMBAC Insured 6/11 at 101.00 AAA 3,955,599
------------------------------------------------------------------------------------------------------------------------------------
20,040 Total Missouri 13,390,689
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,005 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 1,027,452
Series 2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax)
1,000 Montana Higher Education Student Assistance Corporation, Student 12/09 at 100.00 A2 1,056,830
Loan Revenue Bonds, Subordinate Series 1999B, 6.400%, 12/01/32
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,005 Total Montana 2,084,282
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 0.2% (0.2% OF TOTAL INVESTMENTS)
1,400 NebHelp Inc., Nebraska, Senior Subordinate Bonds, Student Loan No Opt. Call AAA 1,451,562
Program, Series 1993A-5A, 6.200%, 6/01/13 - MBIA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 1.7% (1.1% OF TOTAL INVESTMENTS)
2,115 Clark County, Nevada, General Obligation Bank Bonds, Southern 6/11 at 100.00 AAA 2,270,685
Nevada Water Authority Loan, Series 2001, 5.300%, 6/01/19
(Pre-refunded 6/01/11) - FGIC Insured
Director of Nevada State Department of Business and
Industry, Revenue Bonds, Las Vegas Monorail Project, First
Tier, Series 2000:
8,000 0.000%, 1/01/19 - AMBAC Insured No Opt. Call AAA 4,756,160
3,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 3,126,810
------------------------------------------------------------------------------------------------------------------------------------
13,115 Total Nevada 10,153,655
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.1% (0.1% OF TOTAL INVESTMENTS)
860 New Hampshire Housing Finance Authority, Single Family Mortgage 1/07 at 101.00 Aa2 880,227
Acquisition Revenue Bonds, Series 1995D, 6.550%, 7/01/26
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 6.0% (4.1% OF TOTAL INVESTMENTS)
1,105 New Jersey Health Care Facilities Financing Authority, FHA- 8/11 at 100.00 AAA 1,109,343
Insured Mortgage Revenue Bonds, Jersey City Medical Center,
Series 2001, 4.800%, 8/01/21 - AMBAC Insured
2,165 New Jersey Higher Education Assistance Authority, Student 6/10 at 101.00 AAA 2,209,447
Loan Revenue Bonds, Series 2000A, 6.000%, 6/01/13 -
MBIA Insured (Alternative Minimum Tax)
4,130 New Jersey Transit Corporation, Certificates of Participation, No Opt. Call AAA 4,564,352
Federal Transit Administration Grants, Series 2002A, 5.500%,
9/15/13 - AMBAC Insured
4,000 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AA- 4,651,440
System Bonds, Series 1999A, 5.750%, 6/15/18
20,000 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 7,769,600
System Bonds, Series 2006C, 0.000%, 12/15/28 - AMBAC Insured
Tobacco Settlement Financing Corporation, New Jersey, Tobacco
Settlement Asset-Backed Bonds, Series 2002:
10,480 5.750%, 6/01/32 6/12 at 100.00 BBB 11,138,563
3,165 6.125%, 6/01/42 6/12 at 100.00 BBB 3,436,620
1,365 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/13 at 100.00 BBB 1,557,861
Settlement Asset-Backed Bonds, Series 2003, 6.750%, 6/01/39
------------------------------------------------------------------------------------------------------------------------------------
46,410 Total New Jersey 36,437,226
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.7% (0.5% OF TOTAL INVESTMENTS)
4,000 University of New Mexico, FHA-Insured Mortgage Hospital Revenue 7/14 at 100.00 AAA 4,201,000
Bonds, Series 2004, 5.000%, 7/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
58
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 15.3% (10.5% OF TOTAL INVESTMENTS)
$ 80 Dormitory Authority of the State of New York, Improvement Revenue 2/08 at 100.00 AAA $ 81,398
Bonds, Mental Health Services Facilities, Series 1996B,
5.125%, 8/15/21 - MBIA Insured
4,600 Dormitory Authority of the State of New York, Improvement 2/07 at 102.00 AAA 4,712,424
Revenue Bonds, Mental Health Services Facilities, Series 1996E,
5.250%, 2/15/18 - AMBAC Insured
2,170 Dormitory Authority of the State of New York, Insured 7/07 at 102.00 AA 2,236,033
Revenue Bonds, Franciscan Health Partnership Obligated Group -
Frances Shervier Home and Hospital, Series 1997, 5.500%,
7/01/17 - RAAI Insured
7,500 Dormitory Authority of the State of New York, Secured Hospital 2/08 at 101.50 AAA 7,771,500
Revenue Refunding Bonds, Wyckoff Heights Medical Center,
Series 1998H, 5.300%, 8/15/21 - MBIA Insured
2,000 Dormitory Authority of the State of New York, Third General 1/08 at 102.00 AAA 2,081,400
Resolution Consolidated Revenue Bonds, City University System,
Series 1997-1, 5.375%, 7/01/24 (Pre-refunded 1/01/08) -
FSA Insured
5,000 Long Island Power Authority, New York, Electric System General 6/08 at 101.00 AAA 5,182,750
Revenue Bonds, Series 1998A, 5.250%, 12/01/26
(Pre-refunded 6/01/08) - FSA Insured
Nassau County, New York, General Obligation Improvement Bonds,
Series 1999B:
4,005 5.250%, 6/01/19 (Pre-refunded 6/01/09) - AMBAC Insured 6/09 at 102.00 AAA 4,253,390
7,005 5.250%, 6/01/21 (Pre-refunded 6/01/09) - AMBAC Insured 6/09 at 102.00 AAA 7,439,450
6,000 New York City Industrial Development Agency, New York, American 8/16 at 101.00 B 7,261,140
Airlines-JFK International Airport Special Facility Revenue
Bonds, Series 2005, 7.750%, 8/01/31 (Alternative Minimum Tax)
5,000 New York City Municipal Water Finance Authority, New York, Water 12/14 at 100.00 AAA 5,285,000
and Sewerage System Revenue Bonds, Fiscal Series 2005B, 5.000%,
6/15/36 - FSA Insured
8,800 New York City Sales Tax Asset Receivable Corporation, New York, 10/14 at 100.00 AAA 9,335,920
Dedicated Revenue Bonds, Local Government Assistance
Corporation, Series 2004A, 5.000%, 10/15/32 - AMBAC Insured
10,000 New York City Transitional Finance Authority, New York, Future 8/09 at 101.00 AAA 10,690,000
Tax Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24
(Pre-refunded 8/15/09)
New York City, New York, General Obligation Bonds,
Fiscal Series 1998F:
1,980 5.250%, 8/01/14 - AMBAC Insured 2/08 at 101.00 AAA 2,034,965
13,930 5.375%, 8/01/19 - MBIA Insured 2/08 at 101.00 AAA 14,368,099
New York City, New York, General Obligation Bonds,
Fiscal Series 1998F:
20 5.250%, 8/01/14 (Pre-refunded 2/01/08) - AMBAC Insured 2/08 at 101.00 Aaa 20,624
70 5.375%, 8/01/19 (Pre-refunded 2/01/08) - MBIA Insured 2/08 at 101.00 AAA 72,288
10,000 Port Authority of New York and New Jersey, Special Project Bonds, 12/07 at 102.00 AAA 10,428,300
JFK International Air Terminal LLC, Sixth Series 1997, 5.900%,
12/01/17 - MBIA Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
88,160 Total New York 93,254,681
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.7% (0.4% OF TOTAL INVESTMENTS)
3,830 Charlotte-Mecklenburg Hospital Authority, North Carolina, 1/15 at 100.00 AA 3,991,435
Healthcare System Revenue Bonds, DBA Carolinas Healthcare
System, Series 2005A, 5.000%, 1/15/45
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 4.0% (2.7% OF TOTAL INVESTMENTS)
2,300 Amherst Exempted Village School District, Ohio, Unlimited Tax 12/11 at 100.00 Aaa 2,467,624
General Obligation School Improvement Bonds, Series 2001,
5.125%, 12/01/21 (Pre-refunded 12/01/11) - FGIC Insured
3,635 Franklin County, Ohio, FHA-Insured Multifamily Housing Mortgage 1/07 at 101.00 Aa2 3,665,752
Revenue Bonds, Hamilton Creek Apartments Project, Series 1994A,
5.550%, 7/01/24 (Alternative Minimum Tax)
3,650 Montgomery County, Ohio, Revenue Bonds, Catholic Health 5/14 at 100.00 AA 3,811,148
Initiatives, Series 2004A, 5.000%, 5/01/30
12,700 Ohio Water Development Authority, Solid Waste Disposal Revenue 9/09 at 102.00 N/R 13,169,265
Bonds, Bay Shore Power, Series 1998B, 6.625%, 9/01/20
(Alternative Minimum Tax)
1,115 Warren County, Ohio, Limited Tax General Obligations, 12/07 at 101.00 Aa2 1,147,335
Series 1997, 5.500%, 12/01/17
------------------------------------------------------------------------------------------------------------------------------------
23,400 Total Ohio 24,261,124
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,355 Portland, Oregon, Downtown Waterfront Urban Renewal and 6/10 at 101.00 Aaa 2,526,680
Redevelopment Revenue Bonds, Series 2000A, 5.500%, 6/15/20 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
59
Nuveen Dividend Advantage Municipal Fund (NAD) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 4.8% (3.3% OF TOTAL INVESTMENTS)
$ 3,480 Allegheny County Hospital Development Authority, 11/10 at 102.00 Ba3 $ 4,162,358
Pennsylvania, Revenue Bonds, West Penn Allegheny Health
System, Series 2000B, 9.250%, 11/15/22
1,710 Carbon County Industrial Development Authority, No Opt. Call BBB- 1,800,698
Pennsylvania, Resource Recovery Revenue Refunding Bonds,
Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10
(Alternative Minimum Tax)
18,900 Philadelphia Airport System, Pennsylvania, Revenue Refunding 6/08 at 102.00 AAA 19,696,068
Bonds, Series 1998A, 5.500%, 6/15/18 - FGIC Insured
(Alternative Minimum Tax)
3,205 Philadelphia School District, Pennsylvania, General 8/12 at 100.00 AAA 3,541,813
Obligation Bonds, Series 2002B, 5.625%, 8/01/16
(Pre-refunded 8/01/12) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
27,295 Total Pennsylvania 29,200,937
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 2.1% (1.4% OF TOTAL INVESTMENTS)
12,500 Puerto Rico Housing Finance Authority, Capital Fund Program No Opt. Call AA 12,647,000
Revenue Bonds, Series 2003, 4.500%, 12/01/23
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 3.2% (2.2% OF TOTAL INVESTMENTS)
2,015 Central Falls, Rhode Island, General Obligation School 5/09 at 102.00 AA 2,166,991
Bonds, Series 1999, 6.250%, 5/15/20 - RAAI Insured
3,500 Providence Redevelopment Agency, Rhode Island, Revenue 4/10 at 101.00 Aaa 3,778,390
Bonds, Public Safety and Municipal Building Projects, Series
1999A, 5.750%, 4/01/29 (Pre-refunded 4/01/10) - AMBAC Insured
12,500 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 13,419,125
Tobacco Settlement Asset-Backed Bonds, Series 2002A, 6.125%,
6/01/32
------------------------------------------------------------------------------------------------------------------------------------
18,015 Total Rhode Island 19,364,506
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,500 Greenville, South Carolina, Hospital Facilities Revenue 5/11 at 101.00 AAA 1,552,800
Bonds, Series 2001, 5.000%, 5/01/31 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.0% (1.3% OF TOTAL INVESTMENTS)
6,400 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/10 at 101.00 AAA 6,875,264
Revenue Bonds, Series 1999D, 6.000%, 3/01/24 - AMBAC Insured
(Alternative Minimum Tax)
2,425 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/11 at 100.00 AAA 2,520,472
Revenue Bonds, Series 2001B, 5.125%, 3/01/26 - FSA Insured
1,910 Sullivan County Health Educational and Housing Facilities 9/16 at 100.00 BBB+ 2,008,747
Board, Tennessee, Revenue Bonds, Wellmont Health System,
Series 2006C, 5.250%, 9/01/36 (WI/DD, Settling 11/02/06)
85 Tennessee Housing Development Agency, Homeownership Program 7/10 at 101.00 AA 86,937
Bonds, Series 2000-1, 6.375%, 7/01/25 (Alternative Minimum Tax)
475 Tennessee Housing Development Agency, Homeownership Program 7/10 at 100.00 AA 485,127
Bonds, Series 2000-2B, 6.250%, 1/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
11,295 Total Tennessee 11,976,547
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 15.2% (10.4% OF TOTAL INVESTMENTS)
1,000 Alliance Airport Authority, Texas, Special Facilities 12/06 at 100.00 CCC+ 1,020,000
Revenue Bonds, American Airlines Inc., Series 1990, 7.500%,
12/01/29 (Alternative Minimum Tax)
2,560 Brazos River Authority, Texas, Pollution Control Revenue 4/13 at 101.00 Baa2 2,994,611
Refunding Bonds, TXU Electric Company, Series 1999C, 7.700%,
3/01/32 (Alternative Minimum Tax)
4,675 Carrollton-Farmers Branch Independent School District, 2/09 at 100.00 AAA 4,923,850
Dallas County, Texas, Unlimited Tax School Building Bonds,
Series 1999, 6.000%, 2/15/20 (Pre-refunded 2/15/09)
2,820 Central Texas Regional Mobility Authority, Travis and 1/15 at 100.00 AAA 2,937,820
Williamson Counties, Toll Road Revenue Bonds, Series 2005,
5.000%, 1/01/45 - FGIC Insured
60
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
Coppell Independent School District, Dallas County, Texas,
Unlimited Tax School Building and Refunding Bonds, Series 1999:
$ 5,130 0.000%, 8/15/20 8/09 at 52.47 AAA $ 2,393,402
7,000 0.000%, 8/15/21 8/09 at 49.48 AAA 3,075,240
7,345 0.000%, 8/15/23 8/09 at 44.01 AAA 2,869,765
7,000 0.000%, 8/15/24 8/09 at 41.50 AAA 2,579,220
7,350 0.000%, 8/15/25 8/09 at 39.14 AAA 2,557,433
7,000 0.000%, 8/15/26 8/09 at 36.91 AAA 2,295,720
820 Dallas Area Rapid Transit, Texas, Senior Lien Sales Tax 12/11 at 100.00 AAA 849,528
Revenue Bonds, Series 2001, 5.000%, 12/01/31 - AMBAC Insured
Harris County Health Facilities Development Corporation,
Texas, Revenue Bonds, Christus Health, Series 1999A:
12,240 5.375%, 7/01/24 (Pre-refunded 7/01/09) - MBIA Insured 7/09 at 101.00 AAA 12,883,946
11,180 5.375%, 7/01/29 (Pre-refunded 7/01/09) - MBIA Insured 7/09 at 101.00 AAA 11,768,180
2,205 Harris County-Houston Sports Authority, Texas, Senior Lien No Opt. Call AAA 1,211,758
Revenue Refunding Bonds, Series 2001A, 0.000%, 11/15/20 -
MBIA Insured
2,500 Houston, Texas, Hotel Occupancy Tax and Special Revenue No Opt. Call AAA 877,800
Bonds, Convention and Entertainment Project, Series 2001B,
0.000%, 9/01/30 - AMBAC Insured
2,500 Jefferson County, Texas, Certificates of Obligation, Series 8/10 at 100.00 AAA 2,709,925
2000, 6.000%, 8/01/25 (Pre-refunded 8/01/10) - FSA Insured
2,000 Laredo, Texas, Sports Venue Sales Tax Revenue Bonds, Series 3/09 at 100.00 AAA 2,079,100
2001, 5.300%, 3/15/26 (Pre-refunded 3/15/09) - FGIC Insured
30,095 Leander Independent School District, Williamson and Travis 8/12 at 27.94 AAA 6,570,039
Counties, Texas, General Obligation Bonds, Series 2004,
0.000%, 8/15/34
9,345 Leander Independent School District, Williamson and Travis 8/15 at 37.33 AAA 2,325,036
Counties, Texas, General Obligation Bonds, Series 2005,
0.000%, 8/15/33 - FGIC Insured
33,160 Leander Independent School District, Williamson and Travis 8/14 at 26.50 AAA 6,087,844
Counties, Texas, General Obligation Bonds, Series 2006,
0.000%, 8/15/38
1,500 Port Arthur, Texas, Jefferson County, General Obligation 2/07 at 100.00 AAA 1,506,270
Bonds, Series 1997, 5.000%, 2/15/21 (Pre-refunded 2/15/07)
- MBIA Insured
1,000 San Antonio, Texas, Water System Revenue Bonds, Series 5/15 at 100.00 AAA 1,022,170
2005, 4.750%, 5/15/37 - MBIA Insured
10,000 Tarrant County Health Facilities Development Corporation, 2/08 at 102.00 AAA 10,372,600
Texas, Revenue Bonds, Texas Health Resources System, Series
1997A, 5.250%, 2/15/17 - MBIA Insured
7,000 White Settlement Independent School District, Tarrant 8/15 at 34.92 AAA 1,626,450
County, Texas, General Obligation Bonds, Series 2005,
0.000%, 8/15/35
Wylie Independent School District, Taylor County, Texas,
General Obligation Bonds, Series 2005:
3,000 0.000%, 8/15/20 8/15 at 78.46 AAA 1,605,690
3,000 0.000%, 8/15/22 8/15 at 70.77 AAA 1,443,330
------------------------------------------------------------------------------------------------------------------------------------
183,425 Total Texas 92,586,727
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.3% (0.2% OF TOTAL INVESTMENTS)
Utah Housing Finance Agency, Single Family Mortgage Bonds,
Series 1999C-2, Class II:
425 5.700%, 7/01/19 (Alternative Minimum Tax) 1/10 at 101.50 AAA 431,813
155 5.750%, 7/01/21 (Alternative Minimum Tax) 1/10 at 101.50 AA 161,849
130 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/09 at 101.00 AA 132,244
Series 1999D, 5.850%, 7/01/21 (Alternative Minimum Tax)
40 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/09 at 101.50 Aa2 40,882
Series 1999F, 6.300%, 7/01/21 (Alternative Minimum Tax)
1,160 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA- 1,187,991
Series 2000F-2, Class III, 6.000%, 1/01/15 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,910 Total Utah 1,954,779
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.6% (0.4% OF TOTAL INVESTMENTS)
3,395 Virginia Small Business Financing Authority, Industrial 11/09 at 102.00 N/R 3,536,368
Development Water Revenue Bonds, S.I.L. Clean Water, LLC
Project, Series 1999, 7.250%, 11/01/24 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
61
Nuveen Dividend Advantage Municipal Fund (NAD) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 11.3% (7.8% OF TOTAL INVESTMENTS)
$ 4,000 Energy Northwest, Washington, Electric Revenue Refunding 7/13 at 100.00 AAA $ 4,388,280
Bonds, Nuclear Project 3, Series 2003A, 5.500%, 7/01/17 -
XLCA Insured
Port of Seattle, Washington, Special Facility Revenue
Bonds, Terminal 18, Series 1999B:
1,755 6.000%, 9/01/15 - MBIA Insured (Alternative Minimum Tax) 3/10 at 101.00 AAA 1,888,187
2,590 6.000%, 9/01/16 - MBIA Insured (Alternative Minimum Tax) 3/10 at 101.00 AAA 2,786,555
Port of Seattle, Washington, Special Facility Revenue
Bonds, Terminal 18, Series 1999C:
875 6.000%, 9/01/15 - MBIA Insured (Alternative Minimum Tax) 3/10 at 101.00 AAA 941,404
1,260 6.000%, 9/01/16 - MBIA Insured (Alternative Minimum Tax) 3/10 at 101.00 AAA 1,355,621
9,760 Tacoma, Washington, Electric System Revenue Refunding 1/11 at 101.00 AAA 10,623,760
Bonds, Series 2001A, 5.625%, 1/01/21 (Pre-refunded 1/01/11)
- FSA Insured
4,800 Washington Public Power Supply System, Revenue Refunding 7/07 at 102.00 AAA 4,942,608
Bonds, Nuclear Project 3, Series 1997A, 5.250%, 7/01/16 -
FSA Insured
7,185 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 7,989,145
Settlement Asset-Backed Revenue Bonds, Series 2002, 6.500%,
6/01/26
11,605 Washington, Certificates of Participation, Washington 7/09 at 100.00 AAA 12,051,212
Convention and Trade Center, Series 1999, 5.250%, 7/01/16 -
MBIA Insured
3,350 Washington, General Obligation Compound Interest Bonds, No Opt. Call AAA 2,110,668
Series 1999S-2, 0.000%, 1/01/18 - FSA Insured
Washington, General Obligation Compound Interest Bonds,
Series 1999S-3:
17,650 0.000%, 1/01/20 No Opt. Call Aa1 10,054,146
18,470 0.000%, 1/01/21 No Opt. Call Aa1 10,025,331
------------------------------------------------------------------------------------------------------------------------------------
83,300 Total Washington 69,156,917
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 6.7% (4.6% OF TOTAL INVESTMENTS)
2,250 Green Bay, Wisconsin, Water System Revenue Bonds, Series 11/14 at 100.00 Aaa 2,378,295
2004, 5.000%, 11/01/29 - FSA Insured
3,810 La Crosse, Wisconsin, Industrial Development Revenue 12/08 at 102.00 AAA 4,021,455
Refunding Bonds, Dairyland Power Cooperative, Series 1997C,
5.550%, 2/01/15 - AMBAC Insured
Wisconsin Health and Educational Facilities Authority,
Revenue Bonds, FH Healthcare Development Inc., Series 1999:
8,375 6.250%, 11/15/20 (Pre-refunded 11/15/09) 11/09 at 101.00 N/R (4) 9,079,673
5,000 6.250%, 11/15/28 (Pre-refunded 11/15/09) 11/09 at 101.00 N/R (4) 5,420,700
4,180 Wisconsin Health and Educational Facilities Authority, 5/09 at 101.00 A 4,333,991
Revenue Bonds, Kenosha Hospital and Medical Center Inc.,
Series 1999, 5.625%, 5/15/29
12,700 Wisconsin Health and Educational Facilities Authority, 8/09 at 101.00 Aaa 13,351,891
Revenue Bonds, Mercy Health System Corporation, Series
1999, 5.500%, 8/15/25 - AMBAC Insured
2,200 Wisconsin Health and Educational Facilities Authority, 8/13 at 100.00 A- 2,282,786
Revenue Bonds, Wheaton Franciscan Services Inc., Series
2003A, 5.125%, 8/15/33
------------------------------------------------------------------------------------------------------------------------------------
38,515 Total Wisconsin 40,868,791
------------------------------------------------------------------------------------------------------------------------------------
$ 1,035,735 Total Investments (cost $821,317,947) - 145.6% 888,546,080
============------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.7% 16,769,781
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.3)% (295,000,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 610,315,861
=====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's or Moody's
rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's
Investor Service, Inc. are considered to be below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
N/R Not rated.
WI/DD Purchased on a when-issued or delayed delivery basis.
(IF) Inverse floating rate investment.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
62
Nuveen Dividend Advantage Municipal Fund 2 (NXZ)
Portfolio of
INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - 144.8% (100.0% OF TOTAL INVESTMENTS)
ALABAMA - 4.2% (2.9% OF TOTAL INVESTMENTS)
$ 18,500 Huntsville Healthcare Authority, Alabama, Revenue Bonds, 6/11 at 101.00 A2 $ 19,792,411
Series 2001A, 5.750%, 6/01/31
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.7% (0.5% OF TOTAL INVESTMENTS)
2,955 Northern Tobacco Securitization Corporation, Alaska, 6/11 at 100.00 AAA 3,186,938
Tobacco Settlement Asset-Backed Bonds, Series 2001, 5.500%,
6/01/29 (Pre-refunded 6/01/11)
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.7% (0.5% OF TOTAL INVESTMENTS)
3,120 Phoenix, Arizona, Civic Improvement Corporation, Senior 7/12 at 100.00 AAA 3,261,898
Lien Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 -
FGIC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.4% (0.3% OF TOTAL INVESTMENTS)
1,800 Arkansas Development Finance Authority, Single Family 1/12 at 100.00 AAA 1,860,840
Mortgage Revenue Bonds, GNMA Mortgage-Backed Securities
Program, Series 2002C, 5.400%, 1/01/34 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 10.8% (7.5% OF TOTAL INVESTMENTS)
6,000 California Educational Facilities Authority, Revenue Bonds, 6/11 at 101.00 AAA 6,363,120
Stanford University, Series 2001Q, 5.250%, 12/01/32
6,000 California Statewide Community Development Authority, No Opt. Call A+ 5,948,160
Revenue Bonds, Kaiser Permanente System, Series 2004G,
2.300%, 4/01/34 (Mandatory put 5/01/07)
13,825 California, Department of Veterans Affairs, Home Purchase 12/06 at 101.00 AAA 13,979,563
Revenue Bonds, Series 2001A, 5.550%, 12/01/25 - AMBAC Insured
11,200 California, General Obligation Bonds, Series 2003, 5.250%, 8/13 at 100.00 A+ 11,982,656
2/01/28
5,000 Golden State Tobacco Securitization Corporation, 6/13 at 100.00 BBB 5,706,450
California, Tobacco Settlement Asset-Backed Bonds, Series
2003A-1, 6.750%, 6/01/39
6,000 Los Angeles Regional Airports Improvement Corporation, 12/12 at 102.00 B 6,748,980
California, Sublease Revenue Bonds, Los Angeles
International Airport, American Airlines Inc. Terminal 4
Project, Series 2002C, 7.500%, 12/01/24 (Alternative Minimum Tax)
160 Yuba County Water Agency, California, Yuba River 3/07 at 100.00 Baa3 158,982
Development Revenue Bonds, Pacific Gas and Electric
Company, Series 1966A, 4.000%, 3/01/16
------------------------------------------------------------------------------------------------------------------------------------
48,185 Total California 50,887,911
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 6.7% (4.6% OF TOTAL INVESTMENTS)
2,730 Colorado Educational and Cultural Facilities Authority, 8/11 at 100.00 AAA 3,158,282
Charter School Revenue Bonds, Peak-to-Peak Charter School,
Series 2001, 7.500%, 8/15/21 (Pre-refunded 8/15/11)
4,335 Denver City and County, Colorado, Airport Revenue Bonds, 11/16 at 100.00 AAA 5,244,830
Series 2006, 7.281%, 11/15/25 - FGIC Insured (IF)
10,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 31.42 AAA 2,723,800
Bonds, Series 2000B, 0.000%, 9/01/28 (Pre-refunded 9/01/10)
- MBIA Insured
1,500 Eagle County Air Terminal Corporation, Colorado, Airport 5/11 at 101.00 N/R 1,629,840
Terminal Revenue Bonds, Series 2001, 7.125%, 5/01/31
(Alternative Minimum Tax)
755 Jefferson County School District R1, Colorado, General 12/14 at 100.00 AAA 808,235
Obligation Bonds, Series 2004, 5.000%, 12/15/22 - FSA
Insured
5,000 Northwest Parkway Public Highway Authority, Colorado, 6/11 at 102.00 AAA 5,352,550
Revenue Bonds, Senior Series 2001A, 5.250%, 6/15/41 -
FSA Insured
63
Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (CONTINUED)
Northwest Parkway Public Highway Authority, Colorado,
Senior Lien Revenue Bonds, Series 2001B:
$ 22,000 0.000%, 6/15/28 - FSA Insured 6/11 at 35.65 AAA $ 6,460,520
17,650 0.000%, 6/15/29 - AMBAC Insured 6/11 at 33.45 AAA 4,863,811
1,000 Plaza Metropolitan District 1, Lakewood, Colorado, Tax 6/14 at 101.00 N/R 1,110,290
Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25
------------------------------------------------------------------------------------------------------------------------------------
64,970 Total Colorado 31,352,158
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.3% (0.1% OF TOTAL INVESTMENTS)
1,145 District of Columbia Tobacco Settlement Corporation, 5/11 at 101.00 BBB 1,235,031
Tobacco Settlement Asset-Backed Bonds, Series 2001, 6.250%,
5/15/24
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 5.0% (3.4% OF TOTAL INVESTMENTS)
15,000 Jacksonville, Florida, Transportation Revenue Bonds, Series 10/11 at 100.00 AAA 15,931,950
2001, 5.250%, 10/01/29 - MBIA Insured
4,000 Miami-Dade County Health Facility Authority, Florida, 8/11 at 101.00 AAA 4,193,360
Hospital Revenue Refunding Bonds, Miami Children's
Hospital, Series 2001A, 5.125%, 8/15/26 - AMBAC Insured
3,000 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/12 at 100.00 AAA 3,173,520
International Airport, Series 2002, 5.375%, 10/01/32 - FGIC
Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
22,000 Total Florida 23,298,830
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 2.2% (1.5% OF TOTAL INVESTMENTS)
Honolulu Board of Water Supply, Hawaii, Water System
Revenue Bonds, Series 2001:
3,000 5.250%, 7/01/26 (Pre-refunded 7/01/11) - FSA Insured 7/11 at 100.00 AAA 3,218,070
6,725 5.250%, 7/01/31 (Pre-refunded 7/01/11) - FSA Insured 7/11 at 100.00 AAA 7,213,840
------------------------------------------------------------------------------------------------------------------------------------
9,725 Total Hawaii 10,431,910
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 11.0% (7.6% OF TOTAL INVESTMENTS)
3,645 Chicago, Illinois, FHA/GNMA Collateralized Multifamily 12/11 at 100.00 A+ 3,786,462
Housing Revenue Bonds, Stone Terrace Apartments, Series
2001A, 5.750%, 12/20/42 (Alternative Minimum Tax)
1,195 Chicago, Illinois, FNMA/GNMA Collateralized Single Family 4/11 at 105.00 AAA 1,212,184
Mortgage Revenue Bonds, Series 2001A, 6.250%, 10/01/32
(Alternative Minimum Tax)
14,920 Chicago, Illinois, General Obligation Bonds, Series 2001A, 1/11 at 101.00 AAA 15,822,212
5.250%, 1/01/33 - MBIA Insured
350 Chicago, Illinois, General Obligation Bonds, Series 2001A, 1/11 at 101.00 AAA 375,932
5.250%, 1/01/33 (Pre-refunded 1/01/11) - MBIA Insured
285 Chicago, Illinois, General Obligation Refunding Bonds, 11/06 at 102.00 AAA 289,027
Series 1996B, 5.125%, 1/01/25 - FGIC Insured
3,180 Illinois Development Finance Authority, Revenue Bonds, 12/21 at 100.00 BBB 3,342,752
Chicago Charter School Foundation, Series 2002A, 6.250%,
12/01/32
5,000 Illinois Development Finance Authority, Revenue Bonds, 9/11 at 100.00 AAA 5,362,700
Illinois Wesleyan University, Series 2001, 5.500%, 9/01/32
- AMBAC Insured
3,100 Illinois Development Finance Authority, Revenue Bonds, 5/11 at 101.00 A- 3,325,463
Midwestern University, Series 2001B, 6.000%, 5/15/31
3,000 Illinois Educational Facilities Authority, Student Housing 5/12 at 101.00 Aaa 3,037,710
Revenue Bonds, Educational Advancement Foundation Fund,
University Center Project, Series 2002, 6.250%, 5/01/34
5,000 Illinois Health Facilities Authority, Revenue Bonds, Edward 2/11 at 101.00 AAA 5,254,450
Hospital Obligated Group, Series 2001B, 5.250%, 2/15/34 -
FSA Insured
2,500 Illinois Housing Development Authority, Homeowner Mortgage 2/16 at 100.00 AA 2,562,950
Revenue Bonds, Series 2006C-2, 5.050%, 8/01/27 (Alternative
Minimum Tax)
2,275 Illinois, Sales Tax Revenue Bonds, Series 2001, 5.500%, 6/11 at 100.00 AAA 2,454,429
6/15/16
4,980 Metropolitan Pier and Exposition Authority, Illinois, 12/06 at 102.00 AAA 5,084,879
Revenue Refunding Bonds, McCormick Place Expansion Project,
Series 1996A, 5.250%, 6/15/27 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
49,430 Total Illinois 51,911,150
------------------------------------------------------------------------------------------------------------------------------------
64
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 4.7% (3.3% OF TOTAL INVESTMENTS)
$ 2,000 Indiana Health Facility Financing Authority, Hospital Revenue 9/11 at 100.00 A- $ 2,081,640
Bonds, Methodist Hospitals Inc., Series 2001, 5.500%, 9/15/31
2,500 Indiana Health Facility Financing Authority, Hospital Revenue No Opt. Call AAA 2,915,750
Refunding Bonds, Columbus Regional Hospital, Series 1993,
7.000%, 8/15/15 - FSA Insured
Indiana Transportation Finance Authority, Highway Revenue
Bonds, Series 2003A:
4,000 5.000%, 6/01/23 - FSA Insured 6/13 at 100.00 AAA 4,238,880
6,000 5.000%, 6/01/24 - FSA Insured 6/13 at 100.00 AAA 6,353,700
3,107 Indianapolis Airport Authority, Indiana, Special Facility 11/06 at 101.00 N/R 177,099
Revenue Bonds, AAR Corporation Assumed Lease, Series 1995,
6.500%, 11/15/31 (Alternative Minimum Tax) (6)
6,100 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, 2/09 at 102.00 BBB 6,372,609
Madison Center Inc., Series 1999, 5.800%, 2/15/24
------------------------------------------------------------------------------------------------------------------------------------
23,707 Total Indiana 22,139,678
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.2% (0.1% OF TOTAL INVESTMENTS)
1,000 Iowa Higher Education Loan Authority, Private College Facility 10/12 at 100.00 A (4) 1,094,550
Revenue Bonds, Wartburg College, Series 2002, 5.500%, 10/01/28
(Pre-refunded 10/01/12) - ACA Insured
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 3.8% (2.7% OF TOTAL INVESTMENTS)
17,000 Wichita, Kansas, Hospital Facilities Revenue Refunding and 11/11 at 101.00 A+ 18,080,010
Improvement Bonds, Via Christi Health System Inc., Series
2001-III, 5.625%, 11/15/31
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 4.6% (3.1% OF TOTAL INVESTMENTS)
1,320 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 1,289,138
Residuals 660-1, 5.850%, 5/01/41 (WI/DD, Settling 11/02/06) -
FGIC Insured (IF)
18,825 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 20,050,320
Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------------
20,145 Total Louisiana 21,339,458
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 4.0% (2.8% OF TOTAL INVESTMENTS)
2,875 Massachusetts Port Authority, Special Facilities Revenue Bonds, 7/07 at 102.00 AAA 2,968,524
BOSFUEL Corporation, Series 1997, 5.750%, 7/01/39 - MBIA
Insured (Alternative Minimum Tax)
15,585 Massachusetts Turnpike Authority, Metropolitan Highway System 1/07 at 102.00 AAA 15,922,727
Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA
Insured
------------------------------------------------------------------------------------------------------------------------------------
18,460 Total Massachusetts 18,891,251
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 14.1% (9.7% OF TOTAL INVESTMENTS)
Detroit, Michigan, Senior Lien Water Supply System Revenue
Bonds, Series 2001A:
20,000 5.500%, 7/01/33 (Pre-refunded 7/01/11) - FGIC Insured 7/11 at 101.00 AAA 21,836,801
15,390 5.250%, 7/01/33 (Pre-refunded 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 16,508,699
14,610 5.250%, 7/01/33 (Pre-refunded 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 15,672,001
4,000 Michigan Municipal Bond Authority, Public School Academy 10/09 at 102.00 Ba1 4,261,000
Revenue Bonds, Detroit Academy of Arts and Sciences Charter
School, Series 2001A, 8.000%, 10/01/31
2,000 Michigan State Hospital Finance Authority, Hospital Revenue 8/08 at 101.00 BB- 2,027,000
Bonds, Detroit Medical Center Obligated Group, Series 1998A,
5.125%, 8/15/18
Michigan State Hospital Finance Authority, Revenue Refunding
Bonds, Detroit Medical Center Obligated Group, Series 1993A:
2,000 6.250%, 8/15/13 2/07 at 100.00 BB- 2,001,140
4,000 6.500%, 8/15/18 2/07 at 100.00 BB- 4,002,760
------------------------------------------------------------------------------------------------------------------------------------
62,000 Total Michigan 66,309,401
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 3.1% (2.2% OF TOTAL INVESTMENTS)
14,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 14,714,140
Minnesota, Airport Revenue Bonds, Series 2001A, 5.250%, 1/01/32
- FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
65
Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 4.8% (3.3% OF TOTAL INVESTMENTS)
$ 21,000 Missouri Health and Educational Facilities Authority, Revenue 6/11 at 101.00 AAA $ 22,634,221
Bonds, SSM Healthcare System, Series 2001A, 5.250%, 6/01/28
(Pre-refunded 6/01/11) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.7% (0.5% OF TOTAL INVESTMENTS)
3,280 Montana Board of Housing, Single Family Program Bonds, Series 12/10 at 100.00 AA+ 3,355,440
2001A-2, 5.700%, 6/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 4.0% (2.8% OF TOTAL INVESTMENTS)
12,275 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 12,793,864
Revenue Bonds, Las Vegas Monorail Project, First Tier, Series
2000, 5.375%, 1/01/40 - AMBAC Insured
3,500 Director of Nevada State Department of Business and Industry, 1/10 at 102.00 N/R 3,649,240
Revenue Bonds, Las Vegas Monorail Project, Second Tier, Series
2000, 7.375%, 1/01/40
2,330 Henderson, Nevada, Healthcare Facility Revenue Bonds, Catholic 7/08 at 101.00 A 2,392,863
Healthcare West, Series 1998A, 5.250%, 7/01/18
------------------------------------------------------------------------------------------------------------------------------------
18,105 Total Nevada 18,835,967
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 2.1% (1.4% OF TOTAL INVESTMENTS)
8,000 New Hampshire Business Finance Authority, Pollution Control 10/08 at 102.00 Baa1 8,329,280
Remarketed Revenue Refunding Bonds, Connecticut Light and Power
Company, Series 1992A, 5.850%, 12/01/22
1,420 New Hampshire Housing Finance Authority, Single Family Mortgage 5/11 at 100.00 Aa2 1,421,420
Acquisition Bonds, Series 2001A, 5.700%, 1/01/31 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
9,420 Total New Hampshire 9,750,700
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 2.4% (1.6% OF TOTAL INVESTMENTS)
3,995 New Jersey Economic Development Authority, Special Facilities 11/10 at 101.00 B 4,260,747
Revenue Bonds, Continental Airlines Inc., Series 2000, 7.000%,
11/15/30 (Alternative Minimum Tax)
465 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 BBB 494,221
Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32
Tobacco Settlement Financing Corporation, New Jersey, Tobacco
Settlement Asset-Backed Bonds, Series 2003:
2,200 6.375%, 6/01/32 6/13 at 100.00 BBB 2,449,238
425 6.750%, 6/01/39 6/13 at 100.00 BBB 485,048
3,085 6.250%, 6/01/43 6/13 at 100.00 BBB 3,412,658
------------------------------------------------------------------------------------------------------------------------------------
10,170 Total New Jersey 11,101,912
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 5.3% (3.6% OF TOTAL INVESTMENTS)
New Mexico Hospital Equipment Loan Council, Hospital Revenue
Bonds, Presbyterian Healthcare Services, Series 2001A:
12,000 5.500%, 8/01/25 (Pre-refunded 8/01/11) 8/11 at 101.00 AA- (4) 13,057,680
10,800 5.500%, 8/01/30 (Pre-refunded 8/01/11) 8/11 at 101.00 AA- (4) 11,751,912
------------------------------------------------------------------------------------------------------------------------------------
22,800 Total New Mexico 24,809,592
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 6.4% (4.5% OF TOTAL INVESTMENTS)
1,300 Dormitory Authority of the State of New York, Revenue Bonds, 7/10 at 101.00 BBB 1,410,708
Mount Sinai NYU Health Obligated Group, Series 2000A, 6.625%,
7/01/19
3,600 Dormitory Authority of the State of New York, Revenue Bonds, 7/10 at 101.00 BBB (4) 3,992,472
Mount Sinai NYU Health Obligated Group, Series 2000A, 6.625%,
7/01/19 (Pre-refunded 7/01/10)
6,000 Long Island Power Authority, New York, Electric System General 5/11 at 100.00 A- 6,349,380
Revenue Bonds, Series 2001L, 5.375%, 5/01/33
5,000 New York City Industrial Development Agency, New York, Special 8/12 at 101.00 B 5,908,250
Facilities Revenue Bonds, JFK Airport - American Airlines Inc.,
Series 2002B, 8.500%, 8/01/28 (Alternative Minimum Tax)
12,000 New York City Municipal Water Finance Authority, New York, 6/11 at 101.00 AA+ 12,646,320
Water and Sewerage System Revenue Bonds, Fiscal Series 2001C,
5.125%, 6/15/33
------------------------------------------------------------------------------------------------------------------------------------
27,900 Total New York 30,307,130
------------------------------------------------------------------------------------------------------------------------------------
66
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.7% (1.1% OF TOTAL INVESTMENTS)
$ 2,950 North Carolina Capital Facilities Financing Agency, Revenue 4/13 at 100.00 AAA $ 3,075,552
Bonds, Johnson and Wales University, Series 2003A, 5.000%,
4/01/33 - XLCA Insured
4,500 North Carolina Eastern Municipal Power Agency, Power System 1/09 at 102.00 BBB 4,734,180
Revenue Refunding Bonds, Series 1999B, 5.600%, 1/01/15
------------------------------------------------------------------------------------------------------------------------------------
7,450 Total North Carolina 7,809,732
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.5% (0.4% OF TOTAL INVESTMENTS)
2,335 North Dakota Housing Finance Agency, Home Mortgage Finance 7/10 at 100.00 Aa1 2,386,860
Program Refunding Bonds, Series 2001A, 5.550%, 1/01/32
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 0.4% (0.3% OF TOTAL INVESTMENTS)
1,845 Columbus City School District, Franklin County, Ohio, General 6/13 at 100.00 AAA 1,993,799
Obligation Bonds, Series 2003, 5.000%, 12/01/28 (Pre-refunded
6/01/13) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.8% (0.6% OF TOTAL INVESTMENTS)
Oklahoma Development Finance Authority, Revenue Refunding
Bonds, Hillcrest Healthcare System, Series 1999A:
2,655 5.125%, 8/15/10 (Pre-refunded 8/15/09) 8/09 at 101.00 AAA 2,785,042
1,000 5.200%, 8/15/11 (Pre-refunded 8/15/09) 8/09 at 101.00 AAA 1,050,960
------------------------------------------------------------------------------------------------------------------------------------
3,655 Total Oklahoma 3,836,002
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 3.8% (2.6% OF TOTAL INVESTMENTS)
8,000 Clackamas County Hospital Facility Authority, Oregon, Revenue 5/11 at 101.00 AA- 8,442,880
Refunding Bonds, Legacy Health System, Series 2001, 5.250%,
5/01/21
9,000 Oregon Department of Administrative Services, Certificates of 5/11 at 101.00 AAA 9,370,530
Participation, Series 2001D, 5.000%, 5/01/26 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
17,000 Total Oregon 17,813,410
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.6% (2.5% OF TOTAL INVESTMENTS)
5,000 Allegheny County Hospital Development Authority, Pennsylvania, 11/10 at 102.00 Ba3 5,970,100
Revenue Bonds, West Penn Allegheny Health System, Series 2000B,
9.250%, 11/15/30
1,930 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 2,032,367
Resource Recovery Revenue Refunding Bonds, Panther Creek
Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative
Minimum Tax)
8,000 Pennsylvania Higher Educational Facilities Authority, Revenue 1/11 at 101.00 Aa3 8,742,640
Bonds, UPMC Health System, Series 2001A, 6.000%, 1/15/31
------------------------------------------------------------------------------------------------------------------------------------
14,930 Total Pennsylvania 16,745,107
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 24.7% (17.1% OF TOTAL INVESTMENTS)
7,500 Austin, Texas, Electric Utility System Revenue Refunding Bonds, 11/10 at 100.00 AAA 7,802,550
Series 2001, 5.000%, 11/15/30 - FSA Insured
Dallas-Fort Worth International Airport Public Facility
Corporation, Texas, Airport Hotel Revenue Bonds, Series 2001:
15,000 5.250%, 1/15/26 - FSA Insured 1/09 at 100.00 AAA 15,435,900
1,750 5.200%, 1/15/31 - FSA Insured 1/09 at 100.00 AAA 1,797,985
6,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise Regional 9/14 at 100.00 N/R 6,587,160
Health System, Series 2004A, 7.125%, 9/01/34
10,000 Gulf Coast Industrial Development Authority, Texas, Solid Waste 4/12 at 100.00 Ba1 11,231,300
Disposal Revenue Bonds, Citgo Petroleum Corporation Project,
Series 1998, 8.000%, 4/01/28 (Alternative Minimum Tax)
3,000 Harris County Health Facilities Development Corporation, Texas, 7/09 at 101.00 AAA 3,157,830
Revenue Bonds, Christus Health, Series 1999A, 5.375%, 7/01/24
(Pre-refunded 7/01/09) - MBIA Insured
30,980 Harris County-Houston Sports Authority, Texas, Junior Lien 11/11 at 100.00 AAA 32,861,416
Revenue Refunding Bonds, Series 2001B, 5.250%, 11/15/40 - MBIA
Insured
40,000 Harris County-Houston Sports Authority, Texas, Senior Lien 11/30 at 54.04 AAA 7,092,400
Revenue Refunding Bonds, Series 2001A, 0.000%, 11/15/40 - MBIA
Insured
67
Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
Hays Consolidated Independent School District, Hays County,
Texas, General Obligation School Building Bonds, Series 2001:
$ 10,715 0.000%, 8/15/25 (Pre-refunded 8/15/11) 8/11 at 43.18 AAA $ 3,870,472
12,940 0.000%, 8/15/26 (Pre-refunded 8/15/11) 8/11 at 40.60 AAA 4,395,589
Houston, Texas, Hotel Occupancy Tax and Special Revenue Bonds,
Convention and Entertainment Project, Series 2001B:
5,000 0.000%, 9/01/30 - AMBAC Insured No Opt. Call AAA 1,755,600
5,000 0.000%, 9/01/31 - AMBAC Insured No Opt. Call AAA 1,680,200
5,000 Metro Health Facilities Development Corporation, Texas, 1/11 at 100.00 B1 5,178,100
Hospital Revenue Bonds, Wilson N. Jones Memorial Hospital,
Series 2001, 7.250%, 1/01/31
10,500 Texas, General Obligation Bonds, Water Financial Assistance 8/11 at 100.00 Aa1 11,103,855
Program, Series 2001, 5.250%, 8/01/35
2,000 Tom Green County Health Facilities Development Corporation, 5/11 at 101.00 Baa3 2,189,280
Texas, Hospital Revenue Bonds, Shannon Health System Project,
Series 2001, 6.750%, 5/15/21
------------------------------------------------------------------------------------------------------------------------------------
165,385 Total Texas 116,139,637
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.2% (0.1% OF TOTAL INVESTMENTS)
5,000 Pocahontas Parkway Association, Virginia, Senior Lien Revenue 8/08 at 23.55 AAA 1,103,950
Bonds, Route 895 Connector Toll Road, Series 1998B, 0.000%,
8/15/33 (Pre-refunded 8/15/08)
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 5.1% (3.5% OF TOTAL INVESTMENTS)
Seattle, Washington, Municipal Light and Power Revenue
Refunding and Improvement Bonds, Series 2001:
4,820 5.500%, 3/01/19 - FSA Insured 3/11 at 100.00 AAA 5,155,183
7,250 5.125%, 3/01/26 - FSA Insured 3/11 at 100.00 AAA 7,591,692
7,500 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 AAA 7,924,725
Bonds, Sisters of Providence Health System, Series 2001A,
5.250%, 10/01/21 - MBIA Insured
970 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 1,078,562
Settlement Asset-Backed Revenue Bonds, Series 2002, 6.500%,
6/01/26
2,100 Washington, Certificates of Participation, Washington 7/09 at 100.00 AAA 2,176,839
Convention and Trade Center, Series 1999, 5.125%, 7/01/13 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
22,640 Total Washington 23,927,001
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.1% (0.8% OF TOTAL INVESTMENTS)
5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 5,176,900
Appalachian Power Company, Series 2003L, 5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 0.7% (0.5% OF TOTAL INVESTMENTS)
1,000 Wisconsin Health and Educational Facilities Authority, Revenue 5/12 at 100.00 N/R (4) 1,165,260
Bonds, Divine Savior Healthcare, Series 2002A, 7.375%, 5/01/26
(Pre-refunded 5/01/12)
2,100 Wisconsin Health and Educational Facilities Authority, Revenue 8/13 at 100.00 A- 2,179,023
Bonds, Wheaton Franciscan Services Inc., Series 2003A, 5.125%,
8/15/33
------------------------------------------------------------------------------------------------------------------------------------
3,100 Total Wisconsin 3,344,283
------------------------------------------------------------------------------------------------------------------------------------
$ 739,157 Total Municipal Bonds (cost $624,209,250) 680,859,208
============------------------------------------------------------------------------------------------------------------------------
68
SHARES DESCRIPTION (1) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 0.0% (0.0% OF TOTAL INVESTMENTS)
AIRLINES - 0.0% (0.0% OF TOTAL INVESTMENTS)
928 UAL Corporation (5) (7) $ 33,352
------------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (cost $29,169) 33,352
---------------------------------------------------------------------------------------------------------------------
Total Investments (cost $624,238,419) - 144.8% 680,892,560
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.4% 11,296,731
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (47.2)% (222,000,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 470,189,291
=====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's or Moody's
rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's
Investor Service, Inc. are considered to be below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
(5) Non-income producing.
(6) On December 9, 2002, UAL Corporation ("UAL"), the holding company of
United Air Lines, Inc., filed for federal bankruptcy protection. The
Adviser determined that it was likely United would not remain current on
their interest payment obligations with respect to the bonds previously
held and thus the Fund had stopped accruing interest on its UAL bonds.
(7) On February 1, 2006, UAL emerged from federal bankruptcy with the
acceptance of its reorganization plan by the bankruptcy court. Under the
settlement agree- ment established to meet UAL's unsecured bond
obligations, the bondholders, including the Fund, received distributions
of UAL common stock over the subse- quent months, and the bankruptcy
court dismissed all unsecured claims of bondholders, including those of
the Fund. On May 3, 2006, the Fund liquidated such UAL common stock
holdings. On October 5, 2006, the Fund received an additional
distribution of UAL common stock as a result of its ownership of UAL
bonds, which it still held at October 31, 2006. Subsequent to fiscal
year-end, the Fund liquidated its UAL common stock holdings.
N/R Not rated.
WI/DD Purchased on a when-issued or delayed delivery basis.
(IF) Inverse floating rate investment.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
69
Nuveen Dividend Advantage Municipal Fund 3 (NZF)
Portfolio of
INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS - 147.8% (100.0% OF TOTAL INVESTMENTS)
ALABAMA - 0.9% (0.6% OF TOTAL INVESTMENTS)
$ 5,655 Alabama State Port Authority, Revenue Bonds, 10/11 at 100.00 AAA $ 5,925,026
State Docks Department Facilities, Series 2001,
5.250%, 10/01/26 - AMBAC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 2.7% (1.8% OF TOTAL INVESTMENTS)
4,000 Alaska Student Loan Corporation, Student 7/08 at 100.00 AAA 4,077,040
Loan Revenue Bonds, Series 1998A, 5.250%, 7/01/14 -
AMBAC Insured (Alternative Minimum Tax)
12,500 Northern Tobacco Securitization Corporation, Alaska, 6/14 at 100.00 Baa3 12,668,750
Tobacco Settlement Asset-Backed Bonds,
Series 2006A, 5.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
16,500 Total Alaska 16,745,790
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.9% (0.6% OF TOTAL INVESTMENTS)
Sebastian County Health Facilities Board, Arkansas, Hospital
Revenue Improvement Bonds, Sparks Regional Medical Center,
Series 2001A:
1,805 5.500%, 11/01/13 11/11 at 101.00 Baa2 1,906,766
1,900 5.500%, 11/01/14 11/11 at 101.00 Baa2 2,001,802
1,745 5.250%, 11/01/21 11/11 at 101.00 Baa2 1,793,302
------------------------------------------------------------------------------------------------------------------------------------
5,450 Total Arkansas 5,701,870
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 11.4% (7.7% OF TOTAL INVESTMENTS)
California Health Facilities Financing Authority, Health
Facility Revenue Bonds, Adventist Health System/West, Series
2003A:
855 5.000%, 3/01/28 3/13 at 100.00 A 882,326
55 5.000%, 3/01/33 3/13 at 100.00 A 56,543
3,335 California Infrastructure Economic Development Bank, First Lien 1/28 at 100.00 AAA 4,715,457
Revenue Bonds, San Francisco Bay Area Toll Bridge,
Series 2003A. Residuals Series 1485, 7.327%, 7/01/33
(Pre-refunded 1/01/28) - AMBAC Insured (IF)
5,000 California Infrastructure Economic Development Bank, 8/11 at 102.00 A+ 5,323,000
Revenue Bonds, Kaiser Hospital Assistance
LLC, Series 2001A, 5.550%, 8/01/31
5,000 California Statewide Community Development Authority, No Opt. Call A+ 4,956,800
Revenue Bonds, Kaiser Permanente System,
Series 2004G, 2.300%, 4/01/34 (Mandatory put 5/01/07)
18,850 California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 19,144,249
Series 2001BZ, 5.350%, 12/01/21 - MBIA
Insured (Alternative Minimum Tax)
Los Angeles Regional Airports Improvement Corporation,
California, Lease Revenue Refunding
Bonds, LAXFUEL Corporation at Los Angeles International
Airport, Series 2001:
13,955 5.750%, 1/01/16 - AMBAC Insured (Alternative Minimum Tax) 1/12 at 100.00 AAA 15,100,845
5,000 5.375%, 1/01/21 - AMBAC Insured (Alternative Minimum Tax) 1/12 at 100.00 AAA 5,229,600
1,500 5.250%, 1/01/23 - AMBAC Insured (Alternative Minimum Tax) 1/12 at 100.00 AAA 1,554,750
10,000 5.500%, 1/01/32 - AMBAC Insured (Alternative Minimum Tax) 1/12 at 100.00 AAA 10,483,900
10,000 San Joaquin Hills Transportation Corridor Agency, No Opt. Call AAA 2,803,500
Orange County, California, Toll Road Revenue
Refunding Bonds, Series 1997A, 0.000%, 1/15/35 - MBIA Insured
3,000 San Mateo County Community College District, No Opt. Call AAA 1,055,820
California, General Obligation Bonds, Series
2006C, 0.000%, 9/01/30 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
76,550 Total California 71,306,790
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 5.1% (3.5% OF TOTAL INVESTMENTS)
2,250 Canterberry Crossing Metropolitan District II, 12/12 at 100.00 N/R 2,449,125
Parker, Colorado, Limited Tax General
Obligation Bonds, Series 2002, 7.375%, 12/01/32
70
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
$ 1,655 Colorado Educational and Cultural Facilities 3/12 at 100.00 N/R $ 1,728,366
Authority, Charter School Revenue Bonds, Belle
Creek Education Center, Series 2002A, 7.625%, 3/15/32
3,240 Colorado Educational and Cultural Facilities 5/12 at 102.00 N/R 3,536,395
Authority, Charter School Revenue Bonds,
Montessori Peaks Building Foundation, Series 2002A, 8.000%,
1,775 Colorado Educational and Cultural Facilities 6/11 at 100.00 Ba1 (4) 2,033,511
5/01/32 Authority, Charter School Revenue Bonds, Weld
County School District 6 - Frontier Academy,
Series 2001, 7.375%, 6/01/31 (Pre-refunded 6/01/11)
3,380 Colorado Housing Finance Authority, Multifamily 10/11 at 100.00 AAA 3,504,080
Project Bonds, Class I, Series 2001A-1,
5.500%, 4/01/31 (Alternative Minimum Tax)
10,100 Colorado Springs, Colorado, Utility System 11/07 at 100.00 AA 10,263,418
Revenue Refunding and Improvement Bonds, Series
1997A, 5.375%, 11/15/26
4,335 Denver City and County, Colorado, Airport Revenue Bonds, 11/16 at 100.00 AAA 5,244,830
Series 2006, 7.281%, 11/15/25 - FGIC Insured (IF)
2,000 Denver City and County, Colorado, Airport System 11/11 at 100.00 AAA 2,141,760
Revenue Refunding Bonds, Series 2001A,
5.500%, 11/15/16 - FGIC Insured (Alternative Minimum Tax)
1,000 Plaza Metropolitan District 1, Lakewood, Colorado, 6/14 at 101.00 N/R 1,110,290
Tax Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25
------------------------------------------------------------------------------------------------------------------------------------
29,735 Total Colorado 32,011,775
------------------------------------------------------------------------------------------------------------------------------------
DELAWARE - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,560 Delaware Housing Authority, Multifamily Mortgage 7/12 at 100.00 Aa3 2,644,736
Revenue Bonds, Series 2001A, 5.400%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 1.0% (0.7% OF TOTAL INVESTMENTS)
6,000 District of Columbia, Revenue Bonds, Catholic University 10/09 at 101.00 AAA 6,368,580
of America, Series 1999, 5.625%, 10/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 1.6% (1.1% OF TOTAL INVESTMENTS)
2,000 Dade County, Florida, Water and Sewerage System Revenue 10/07 at 102.00 AAA 2,069,820
Bonds, Series 1997, 5.375%, 10/01/16 - FGIC Insured
Orange County Housing Finance Authority, Florida, Multifamily
Housing Revenue Bonds, Oak Glen Apartments, Series 2001G:
1,105 5.400%, 12/01/32 - FSA Insured 12/11 at 100.00 AAA 1,141,134
2,195 5.450%, 12/01/41 - FSA Insured 12/11 at 100.00 AAA 2,264,164
4,175 Pace Property Finance Authority Inc., Florida, 9/07 at 102.00 AAA 4,311,731
Utility System Improvement and Revenue
Refunding Bonds, Series 1997, 5.250%, 9/01/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
9,475 Total Florida 9,786,849
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 1.9% (1.3% OF TOTAL INVESTMENTS)
5,000 Atlanta, Georgia, Airport General Revenue Bonds, 1/10 at 101.00 AAA 5,276,350
Series 2000B, 5.625%, 1/01/30 - FGIC Insured
(Alternative Minimum Tax)
2,700 Atlanta, Georgia, Tax Allocation Bonds, 12/11 at 101.00 N/R 3,006,693
Atlantic Station Project, Series 2001, 7.900%, 12/01/24
3,740 Gainesville and Hall County Hospital Authority, 5/11 at 100.00 A- 3,913,012
Georgia, Revenue Anticipation Certificates, Northeast
Georgia Health Services Inc., Series 2001, 5.500%, 5/15/31
------------------------------------------------------------------------------------------------------------------------------------
11,440 Total Georgia 12,196,055
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 17.7% (12.0% OF TOTAL INVESTMENTS)
285 Chicago, Illinois, General Obligation Refunding Bonds, 11/06 at 102.00 AAA 289,027
Series 1996B, 5.125%, 1/01/25 - FGIC Insured
8,375 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1/11 at 101.00 AAA 8,914,936
2001A, 5.500%, 1/01/19 - FSA Insured (Alternative Minimum Tax)
1,750 Chicago, Illinois, Sales Tax Revenue Bonds, 7/08 at 102.00 AAA 1,822,800
Series 1998, 5.250%, 1/01/28 - FGIC Insured
10,800 Chicago, Illinois, Sales Tax Revenue Bonds, 1/09 at 101.00 AAA 11,301,336
Series 1999, 5.375%, 1/01/30 (Pre-refunded
1/01/09) - FGIC Insured
71
Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 4,950 Chicago, Illinois, Second Lien Passenger Facility 1/11 at 101.00 AAA $ 5,181,957
Charge Revenue Bonds, O'Hare International
Airport, Series 2001A, 5.375%, 1/01/32 -
AMBAC Insured (Alternative Minimum Tax)
8,610 Chicago, Illinois, Second Lien Wastewater 1/11 at 100.00 AAA 9,238,961
Transmission Revenue Bonds, Series 2001A, 5.500%,
1/01/26 (Pre-refunded 1/01/11) - AMBAC Insured
2,220 Chicago, Illinois, Second Lien Wastewater No Opt. Call AAA 2,505,115
Transmission Revenue Bonds, Series 2001A, 5.500%,
1/01/16 - MBIA Insured
10,000 Chicago, Illinois, Senior Lien Water 11/11 at 100.00 AAA 10,661,300
Revenue Bonds, Series 2001, 5.000%, 11/01/26
(Pre-refunded 11/01/11) - AMBAC Insured
1,665 Chicago, Illinois, Third Lien General Airport 1/16 at 100.00 AAA 1,758,240
Revenue Bonds, O'Hare International Airport,
Series 2005A, 5.000%, 1/01/33 - FGIC Insured
2,415 Illinois Finance Authority, General Obligation 12/14 at 100.00 Aaa 2,555,505
Debt Certificates, Local Government Program -
Kankakee County, Series 2005B, 5.000%, 12/01/24 - AMBAC Insured
1,100 Illinois Health Facilities Authority, Revenue 5/10 at 101.00 Baa2 1,184,535
Bonds, Condell Medical Center, Series 2000, 6.500%, 5/15/30
9,000 Illinois Health Facilities Authority, Revenue 12/11 at 101.00 BBB 9,508,410
Bonds, Covenant Retirement Communities Inc.,
Series 2001, 5.875%, 12/01/31
15,000 Illinois Health Facilities Authority, Revenue Bonds, 7/11 at 100.00 Baa1 16,014,600
Loyola University Health System, Series 2001A, 6.125%, 7/01/31
5,000 Lake County School District 38, Big Hallow, No Opt. Call Aaa 2,582,350
Illinois, General Obligation Bonds, Series 2005,
0.000%, 2/01/22 - AMBAC Insured
7,000 Lombard Public Facilities Corporation, Illinois, 1/16 at 100.00 N/R 7,529,410
First Tier Conference Center and Hotel
Revenue Bonds, Series 2005A-1, 7.125%, 1/01/36
16,900 Metropolitan Pier and Exposition Authority, Illinois, 12/09 at 101.00 AAA 17,764,604
Revenue Bonds, McCormick Place Expansion
Project, Series 1999A, 5.250%, 12/15/28 - FGIC Insured
2,000 Metropolitan Pier and Exposition Authority, No Opt. Call AAA 2,388,660
Illinois, Revenue Refunding Bonds, McCormick Place
Expansion Project, Series 1998A, 5.500%, 6/15/29 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
107,070 Total Illinois 111,201,746
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 5.8% (3.9% OF TOTAL INVESTMENTS)
Clark-Pleasant Community School Building Corporation,
Indiana, First Mortgage Bonds, Series 2001:
1,255 5.000%, 7/15/21 (Pre-refunded 1/15/12) - AMBAC Insured 1/12 at 100.00 AAA 1,340,240
1,000 5.000%, 1/15/26 (Pre-refunded 1/15/12) - AMBAC Insured 1/12 at 100.00 AAA 1,067,920
Evansville Vanderburgh Public Library Lease Corporation,
Indiana, First Mortgage Bonds, Series 2001:
2,000 5.750%, 7/15/18 (Pre-refunded 1/15/12) - MBIA Insured 1/12 at 100.00 AAA 2,206,540
2,750 5.125%, 1/15/24 (Pre-refunded 1/15/12) - MBIA Insured 1/12 at 100.00 AAA 2,952,978
3,395 Gary, Indiana, GNMA/FHA Mortgage Revenue Bonds, 11/11 at 102.00 AAA 3,491,995
Windsor Square Project, Series 2001A, 5.375%,
10/20/41 (Alternative Minimum Tax)
1,250 Hamilton Southeastern Cumberland Campus School 1/12 at 100.00 AAA 1,323,250
Building Corporation, Indiana, First Mortgage
Bonds, Series 2001, 5.125%, 1/15/23 - AMBAC Insured
9,500 Indiana Educational Facilities Authority, Revenue Bonds, Butler 2/11 at 100.00 AAA 10,123,865
University, Series 2001, 5.500%, 2/01/26 - MBIA Insured
4,230 Indiana Finance Authority, Educational Facilities Revenue 6/15 at 100.00 Aa3 4,448,268
Bonds, Tudor Park Foundation, Series 2005B, 5.000%, 6/01/24
2,800 Indiana Health Facility Financing Authority, 5/15 at 100.00 AAA 2,941,372
Revenue Bonds, Community Hospitals of Indiana,
Series 2005A, 5.000%, 5/01/35 - AMBAC Insured
2,650 Indianapolis Airport Authority, Indiana, Special 11/06 at 101.00 N/R 151,055
Facility Revenue Bonds, AAR Corporation Assumed Lease,
Series 1995, 6.500%, 11/15/31 (Alternative Minimum Tax) (6)
3,500 University of Southern Indiana, Student Fee Bonds, 10/11 at 100.00 Aaa 3,697,085
Series 2001H, 5.000%, 10/01/21 - AMBAC Insured
72
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDIANA (continued)
Wayne County Jail Holding Corporation, Indiana,
First Mortgage Bonds, Series 2001:
$ 1,150 5.625%, 7/15/18 - AMBAC Insured 1/13 at 101.00 AAA $ 1,275,764
1,090 5.500%, 7/15/22 - AMBAC Insured 1/13 at 101.00 AAA 1,196,340
------------------------------------------------------------------------------------------------------------------------------------
36,570 Total Indiana 36,216,672
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 5.8% (3.9% OF TOTAL INVESTMENTS)
2,000 Iowa Finance Authority, Healthcare Revenue Bonds, 5/11 at 100.00 Aaa 2,086,340
Great River Medical Center, Series 2001,
5.250%, 5/15/31 - FSA Insured
Iowa Tobacco Settlement Authority, Tobacco Settlement
Asset-Backed Revenue Bonds, Series 2001B:
28,000 5.300%, 6/01/25 (Pre-refunded 6/01/11) 6/11 at 101.00 AAA 29,955,520
3,950 5.600%, 6/01/35 (Pre-refunded 6/01/11) 6/11 at 101.00 AAA 4,304,829
------------------------------------------------------------------------------------------------------------------------------------
33,950 Total Iowa 36,346,689
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 3.1% (2.1% OF TOTAL INVESTMENTS)
18,500 Louisville and Jefferson County Metropolitan 11/11 at 101.00 AAA 19,653,475
Sewer District, Kentucky, Sewer and Drainage System
Revenue Bonds, Series 2001A, 5.125%, 5/15/27 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 3.4% (2.3% OF TOTAL INVESTMENTS)
19,890 Tobacco Settlement Financing Corporation, 5/11 at 101.00 BBB 21,184,640
Louisiana, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 5.875%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.0% (0.7% OF TOTAL INVESTMENTS)
Maine State Housing Authority, Single Family
Mortgage Purchase Bonds, Series 2001B:
4,610 5.400%, 11/15/21 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 4,752,495
1,745 5.500%, 11/15/32 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 1,774,019
------------------------------------------------------------------------------------------------------------------------------------
6,355 Total Maine 6,526,514
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 2.3% (1.5% OF TOTAL INVESTMENTS)
1,570 Maryland Community Development Administration, 7/11 at 100.00 Aa2 1,617,304
Insured Multifamily Housing Mortgage Loan
Revenue Bonds, Series 2001B, 5.250%, 7/01/21
(Alternative Minimum Tax)
2,000 Maryland Economic Development Corporation, Revenue 12/16 at 100.00 N/R 2,007,000
Bonds, Chesapeake Bay Hyatt Conference
Center, Series 2006A, 5.000%, 12/01/31
10,600 Maryland Energy Financing Administration, Revenue 9/07 at 100.00 N/R 10,683,316
Bonds, AES Warrior Run Project, Series 1995,
7.400%, 9/01/19 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
14,170 Total Maryland 14,307,620
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.8% (0.6% OF TOTAL INVESTMENTS)
5,000 Massachusetts Port Authority, Special Facilities 1/11 at 101.00 AAA 5,268,200
Revenue Bonds, Delta Air Lines Inc., Series
2001A, 5.500%, 1/01/18 - AMBAC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 9.1% (6.2% OF TOTAL INVESTMENTS)
15,000 Detroit City School District, Wayne County, Michigan, No Opt. Call AAA 18,809,100
Unlimited Tax School Building and Site
Improvement Bonds, Series 2001A, 6.000%, 5/01/29 - FSA Insured
11,000 Kent Hospital Finance Authority, Michigan, Revenue 7/11 at 101.00 AA (4) 11,992,090
Bonds, Spectrum Health, Series 2001A,
5.500%, 1/15/31 (Pre-refunded 7/15/11)
1,235 Michigan State Building Authority, Revenue Bonds, 10/11 at 100.00 AA- 1,333,924
Facilities Program, Series 2001I, 5.500%, 10/15/18
1,355 Michigan State Hospital Finance Authority, Hospital 8/08 at 101.00 BB- 1,373,997
Revenue Bonds, Detroit Medical Center
Obligated Group, Series 1998A, 5.250%, 8/15/23
3,485 Michigan State Hospital Finance Authority, Hospital Revenue No Opt. Call AAA 3,728,845
Refunding Bonds, Sisters of Mercy Health Corporation,
Series 1993P, 5.375%, 8/15/14 - MBIA Insured (ETM)
Michigan State Hospital Finance Authority, Hospital Revenue
Refunding Bonds, Sparrow Obligated Group, Series 2001:
1,400 5.500%, 11/15/21 11/11 at 101.00 A+ 1,487,640
2,500 5.625%, 11/15/31 11/11 at 101.00 A+ 2,657,675
73
Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN (continued)
$ 12,640 Royal Oak Hospital Finance Authority, Michigan, 11/11 at 100.00 AAA $ 13,257,338
Hospital, Series 2001M, 5.250%, 11/15/31 - MBIA Insured
Hospital Revenue Bonds, William Beaumont
2,395 Ypsilanti Community Utilities Authority, Washtenaw County, 5/11 at 100.00 AAA 2,515,804
Michigan, General Obligation Bonds, Sanitary Sewerage System 3,
Series 2001, 5.100%, 5/01/31 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
51,010 Total Michigan 57,156,413
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,330 Dakota County Community Development Agency, Minnesota, GNMA 10/11 at 105.00 Aaa 2,484,619
Collateralized Multifamily Housing Revenue Bonds, Rose Apartments
Project, Series 2001, 6.350%, 10/20/37 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.4% (0.2% OF TOTAL INVESTMENTS)
2,155 Mississippi Business Finance Corporation, GNMA Collateralized 5/09 at 103.00 AAA 2,236,437
Retirement Facility Mortgage Revenue Refunding Bonds, Aldersgate
Retirement Community Inc. Project, Series 1999A, 5.450%, 5/20/34
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 2.5% (1.7% OF TOTAL INVESTMENTS)
1,825 Fenton, Missouri, Tax Increment Refunding and Improvement Revenue 10/12 at 100.00 N/R (4) 2,064,896
Bonds, Gravois Bluffs Redevelopment Project, Series 2002,
6.125%, 10/01/21 (Pre-refunded 10/01/12)
Missouri Development Finance Board, Cultural Facilities
Revenue Bonds, Nelson Gallery Foundation, Series 2001A:
3,335 5.250%, 12/01/19 - MBIA Insured 12/11 at 100.00 AAA 3,574,820
3,510 5.250%, 12/01/20 - MBIA Insured 12/11 at 100.00 AAA 3,762,404
3,695 5.250%, 12/01/21 - MBIA Insured 12/11 at 100.00 AAA 3,960,707
2,040 5.250%, 12/01/22 - MBIA Insured 12/11 at 100.00 AAA 2,175,497
------------------------------------------------------------------------------------------------------------------------------------
14,405 Total Missouri 15,538,324
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.8% (0.5% OF TOTAL INVESTMENTS)
5,000 Montana Board of Investments, Exempt Facility Revenue 7/10 at 101.00 B2 5,215,400
Bonds, Stillwater Mining Company, Series 2000, 8.000%,
7/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 1.1% (0.8% OF TOTAL INVESTMENTS)
Nebraska Investment Finance Authority, Single Family
Housing Revenue Bonds, Series 2001D:
2,255 5.250%, 9/01/21 (Alternative Minimum Tax) 9/11 at 100.00 AAA 2,290,877
3,035 5.375%, 9/01/32 (Alternative Minimum Tax) 9/11 at 100.00 AAA 3,082,194
1,500 Omaha Public Power District, Nebraska, Electric System Revenue 2/17 at 100.00 AAA 1,746,780
Bonds, Nebraska City 2, Series 2006A, Residuals 1508-2, 7.530%,
2/01/49 (WI/DD, Settling 11/02/06) - AMBAC Insured (IF)
------------------------------------------------------------------------------------------------------------------------------------
6,790 Total Nebraska 7,119,851
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 7.8% (5.2% OF TOTAL INVESTMENTS)
35,000 Clark County, Nevada, Limited Tax General Obligation 7/10 at 100.00 AAA 37,331,347
Bank Bonds, Series 2000, 5.500%, 7/01/30
(Pre-refunded 7/01/10) - MBIA Insured
2,000 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 2,084,540
Revenue Bonds, Las Vegas Monorail Project, First Tier, Series
2000, 5.375%, 1/01/40 - AMBAC Insured
4,000 Director of Nevada State Department of Business and Industry, 1/10 at 102.00 N/R 4,170,560
Revenue Bonds, Las Vegas Monorail Project, Second Tier, Series
2000, 7.375%, 1/01/40
255 Nevada Housing Division, Single Family Mortgage Bonds, Senior 4/08 at 101.50 Aaa 256,443
Series 1998A-1, 5.300%, 4/01/18 (Alternative Minimum Tax)
4,290 University of Nevada, Revenue Bonds, Community College System, 1/12 at 100.00 AAA 4,554,264
Series 2001A, 5.250%, 7/01/26 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
45,545 Total Nevada 48,397,154
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.4% (0.2% OF TOTAL INVESTMENTS)
2,000 New Hampshire Health and Education Authority, Hospital 10/11 at 101.00 Aaa 2,166,780
Revenue Bonds, Concord Hospital, Series 2001, 5.500%,
10/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
74
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 3.7% (2.5% OF TOTAL INVESTMENTS)
$ 10,000 New Jersey Economic Development Authority, Water Facilities 11/12 at 101.00 Aaa $ 10,576,500
Revenue Bonds, American Water Company, Series 2002A, 5.250%,
11/01/32 - AMBAC Insured (Alternative Minimum Tax)
4,125 New Jersey Transit Corporation, Certificates of Participation, No Opt. Call AAA 4,558,826
Federal Transit Administration Grants,
Series 2002A, 5.500%, 9/15/13 - AMBAC Insured
20,000 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 7,769,600
System Bonds, Series 2006C,
0.000%, 12/15/28 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
34,125 Total New Jersey 22,904,926
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 4.8% (3.2% OF TOTAL INVESTMENTS)
1,780 East Rochester Housing Authority, New York, GNMA 10/11 at 101.00 AAA 1,853,710
Secured Revenue Bonds, Gates Senior Housing
Inc., Series 2001, 5.300%, 4/20/31
4,155 Monroe County Airport Authority, New York, Revenue Refunding No Opt. Call AAA 4,562,938
Bonds, Greater Rochester International Airport, Series 1999,
5.750%, 1/01/13 - MBIA Insured (Alternative Minimum Tax)
7,000 New York City Industrial Development Agency, New York, 8/16 at 101.00 B 8,471,330
American Airlines-JFK International Airport Special Facility
Revenue Bonds, Series 2005, 7.750%, 8/01/31
(Alternative Minimum Tax)
New York City Municipal Water Finance Authority, New York,
Water and Sewerage System Revenue
Bonds, Fiscal Series 2001A:
3,610 5.500%, 6/15/33 (Pre-refunded 6/15/10) - MBIA Insured 6/10 at 101.00 AAA 3,886,201
5,710 5.500%, 6/15/33 (Pre-refunded 6/15/10) - FGIC Insured 6/10 at 101.00 AAA 6,146,872
2,500 New York City, New York, General Obligation Bonds, 8/12 at 100.00 AAA 2,761,350
Fiscal Series 2002G, 5.625%, 8/01/20 - MBIA Insured
2,000 New York State Tobacco Settlement Financing Corporation, 6/11 at 100.00 AA- 2,147,380
Tobacco Settlement Asset-Backed and State Contingency
Contract-Backed Bonds, Series 2003B-1C, 5.500%, 6/01/16
------------------------------------------------------------------------------------------------------------------------------------
26,755 Total New York 29,829,781
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.1% (0.7% OF TOTAL INVESTMENTS)
Charlotte-Mecklenburg Hospital Authority, North Carolina,
Healthcare System Revenue Bonds, DBA
Carolinas Healthcare System, Series 2005A:
1,750 4.875%, 1/15/32 1/15 at 100.00 AA 1,801,153
3,000 5.000%, 1/15/45 1/15 at 100.00 AA 3,126,450
1,800 North Carolina Municipal Power Agency 1, Catawba No Opt. Call A3 1,952,820
Electric Revenue Bonds, Series 2003A, 5.500%, 1/01/13
------------------------------------------------------------------------------------------------------------------------------------
6,550 Total North Carolina 6,880,423
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.2% (1.5% OF TOTAL INVESTMENTS)
2,170 Ohio Housing Finance Agency, GNMA Mortgage-Backed Securities 3/08 at 101.50 AAA 2,222,796
Program Residential Mortgage Revenue Bonds, Series 1998A-1,
5.300%, 9/01/19 - FSA Insured (Alternative Minimum Tax)
7,400 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 7,673,430
Revenue Bonds, Bay Shore Power, Series 1998B, 6.625%,
9/01/20 (Alternative Minimum Tax)
Portage County, Ohio, General Obligation Bonds, Series 2001:
1,870 5.000%, 12/01/21 - FGIC Insured 12/11 at 100.00 AAA 1,979,432
1,775 5.000%, 12/01/23 - FGIC Insured 12/11 at 100.00 AAA 1,868,365
------------------------------------------------------------------------------------------------------------------------------------
13,215 Total Ohio 13,744,023
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,500 Oklahoma Development Finance Authority, Revenue Refunding Bonds, 8/09 at 101.00 AAA 2,655,325
Hillcrest Healthcare System, Series 1999A, 5.625%,
8/15/29 (Pre-refunded 8/15/09)
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 2.4% (1.7% OF TOTAL INVESTMENTS)
4,700 Oregon Health, Housing, Educational and Cultural Facilities 11/11 at 101.00 AAA 5,009,683
Authority, Revenue Bonds, PeaceHealth Project,
Series 2001, 5.250%, 11/15/21 - AMBAC Insured
10,000 Oregon Housing and Community Services Department, 7/10 at 100.00 Aaa 10,334,100
Multifamily Housing Revenue Bonds, Series
2000A, 6.050%, 7/01/42 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
14,700 Total Oregon 15,343,783
------------------------------------------------------------------------------------------------------------------------------------
75
Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 1.9% (1.3% OF TOTAL INVESTMENTS)
Allegheny County Hospital Development Authority,
Pennsylvania, Revenue Bonds, West Penn
Allegheny Health System, Series 2000B:
$ 2,000 9.250%, 11/15/22 11/10 at 102.00 Ba3 $ 2,392,160
2,000 9.250%, 11/15/30 11/10 at 102.00 Ba3 2,388,040
3,500 Pennsylvania Economic Development Financing Authority, Senior 1/07 at 100.00 B+ 3,540,040
Lien Resource Recovery Revenue Bonds, Northampton Generating
Project, Series 1994A, 6.600%, 1/01/19 (Alternative Minimum Tax)
3,205 Philadelphia School District, Pennsylvania, General Obligation 8/12 at 100.00 AAA 3,541,813
Bonds, Series 2002B, 5.625%, 8/01/16 (Pre-refunded 8/01/12) -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
10,705 Total Pennsylvania 11,862,053
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 1.6% (1.1% OF TOTAL INVESTMENTS)
2,185 Greenville County, South Carolina, Special Source 4/11 at 101.00 AAA 2,359,625
Revenue Bonds, Road Improvement Project,
Series 2001, 5.500%, 4/01/21 - AMBAC Insured
6,850 South Carolina Transportation Infrastructure Bank, 10/11 at 100.00 Aaa 7,429,853
Revenue Bonds, Series 2001A, 5.500%,
10/01/22 (Pre-refunded 10/01/11) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
9,035 Total South Carolina 9,789,478
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.3% (0.9% OF TOTAL INVESTMENTS)
5,210 Memphis-Shelby County Airport Authority, Tennessee, 3/11 at 100.00 AAA 5,516,088
Airport Revenue Bonds, Series 2001A, 5.500%,
3/01/14 - FSA Insured (Alternative Minimum Tax)
275 Sullivan County Health Educational and Housing Facilities Board, 9/16 at 100.00 BBB+ 289,218
Tennessee, Revenue Bonds, Wellmont Health System, Series 2006C,
5.250%, 9/01/36 (WI/DD, Settling 11/02/06)
1,130 Tennessee Housing Development Agency, Homeownership Program Bonds, 1/09 at 101.00 AA 1,154,205
Series 1998-2, 5.350%, 7/01/23 (Alternative Minimum Tax)
1,130 Tennessee Housing Development Agency, Homeownership Program Bonds, 7/11 at 100.00 AA 1,159,448
Series 2001-3A, 5.200%, 7/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,745 Total Tennessee 8,118,959
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 18.6% (12.6% OF TOTAL INVESTMENTS)
1,125 Brushy Creek Municipal Utility District, Williamson County, Texas, 6/09 at 100.00 Aaa 1,159,076
Combination Unlimited Tax and Revenue Refunding Bonds,
Series 2001, 5.125%, 6/01/26 - FSA Insured
Collins and Denton Counties, Frisco, Texas,
General Obligation Bonds, Series 2001:
1,910 5.000%, 2/15/20 - FGIC Insured 2/11 at 100.00 AAA 2,000,973
2,005 5.000%, 2/15/21 - FGIC Insured 2/11 at 100.00 AAA 2,103,726
3,850 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 AAA 4,112,070
Refunding and Improvement Bonds, Series 2001A, 5.500%,
11/01/35 - FGIC Insured (Alternative Minimum Tax)
5,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise 9/14 at 100.00 N/R 5,481,600
Regional Health System, Series 2004A, 7.000%, 9/01/25
4,040 Harris County, Texas, Tax and Revenue Certificates of 8/11 at 100.00 AA+ 4,190,167
Obligation, Series 2001, 5.000%, 8/15/27
6,000 Houston, Texas, Junior Lien Water and Sewerage System No Opt. Call AAA 7,260,900
Revenue Refunding Bonds, Series 2001B,
5.500%, 12/01/29 - MBIA Insured (ETM)
7,000 Houston, Texas, Subordinate Lien Airport System Revenue 7/08 at 101.00 AAA 7,224,350
Bonds, Series 1998B, 5.250%, 7/01/14 -
FGIC Insured (Alternative Minimum Tax)
Houston, Texas, Subordinate Lien Airport System Revenue
Refunding Bonds, Series 2001A:
2,525 5.500%, 7/01/13 - FGIC Insured (Alternative Minimum Tax) 1/12 at 100.00 AAA 2,704,932
2,905 5.500%, 7/01/14 - FGIC Insured (Alternative Minimum Tax) 1/12 at 100.00 AAA 3,135,250
Jefferson County Health Facilities Development Corporation,
Texas, FHA-Insured Mortgage Revenue Bonds,
Baptist Hospital of Southeast Texas, Series 2001:
8,500 5.400%, 8/15/31 - AMBAC Insured 8/11 at 100.00 AAA 9,015,695
8,500 5.500%, 8/15/41 - AMBAC Insured 8/11 at 100.00 AAA 9,061,595
10,700 Laredo Independent School District, Webb County, 8/11 at 100.00 AAA 11,224,193
Texas, General Obligation Refunding Bonds, Series 2001,
5.000%, 8/01/25
76
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 2,500 Matagorda County Navigation District 1, Texas, Collateralized No Opt. Call AAA $ 2,782,025
Revenue Refunding Bonds, Houston Light and Power Company,
Series 1997, 5.125%, 11/01/28 - AMBAC Insured
(Alternative Minimum Tax)
1,540 Medina Valley Independent School District, Medina County, Texas, 2/11 at 100.00 Aaa 1,642,271
General Obligation Bonds, Series 2001, 5.250%,
2/15/26 (Pre-refunded 2/15/11)
5,430 Mineral Wells Independent School District, Pale Pinto and Parker 2/08 at 100.00 Aaa 5,474,255
Counties, Texas, Unlimited School Tax Building and Refunding
Bonds, Series 1998, 4.750%, 2/15/22
2,905 North Central Texas Health Facilities Development 2/08 at 102.00 AAA 3,014,577
Corporation, Revenue Bonds, Texas Health Resources System,
Series 1997B, 5.375%, 2/15/26 - MBIA Insured
95 North Central Texas Health Facilities Development 2/08 at 102.00 Aaa 98,982
Corporation, Revenue Bonds, Texas Health Resources System,
Series 1997B, 5.375%, 2/15/26 (Pre-refunded 2/15/08) -
MBIA Insured
3,045 Port of Houston Authority, Harris County, Texas, General 10/11 at 100.00 AAA 3,243,443
Obligation Port Improvement Bonds, Series 2001B, 5.500%,
10/01/17 - FGIC Insured (Alternative Minimum Tax)
10,665 Texas Department of Housing and Community Affairs, 7/11 at 100.00 AAA 11,052,033
Residential Mortgage Revenue Bonds, Series
2001A, 5.350%, 7/01/33 (Alternative Minimum Tax)
15,700 Texas Water Development Board, Senior Lien State Revolving 1/07 at 100.00 AAA 15,743,018
Fund Revenue Bonds, Series 1996B, 5.125%, 7/15/18
White Settlement Independent School District, Tarrant County,
Texas, General Obligation Bonds, Series 2006:
9,110 0.000%, 8/15/37 8/15 at 31.98 AAA 1,934,964
9,110 0.000%, 8/15/40 8/15 at 27.11 AAA 1,634,698
7,110 0.000%, 8/15/44 8/15 at 21.88 AAA 1,028,248
------------------------------------------------------------------------------------------------------------------------------------
131,270 Total Texas 116,323,041
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.9% (0.6% OF TOTAL INVESTMENTS)
Utah Housing Corporation, Single Family Mortgage
Bonds, Series 2001E:
1,855 5.200%, 1/01/18 (Alternative Minimum Tax) 7/11 at 100.00 AA- 1,898,092
595 5.500%, 1/01/23 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 609,815
Utah Housing Corporation, Single Family Mortgage
Bonds, Series 2001F-1:
2,375 4.950%, 7/01/18 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 2,394,617
610 5.300%, 7/01/23 (Alternative Minimum Tax) 7/11 at 100.00 AA- 617,210
------------------------------------------------------------------------------------------------------------------------------------
5,435 Total Utah 5,519,734
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.8% (0.5% OF TOTAL INVESTMENTS)
7,000 Pocahontas Parkway Association, Virginia, Senior Lien 8/08 at 77.58 AAA 5,090,890
Revenue Bonds, Route 895 Connector Toll Road,
Series 1998B, 0.000%, 8/15/13 (Pre-refunded 8/15/08)
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 15.4% (10.4% OF TOTAL INVESTMENTS)
Bellingham Housing Authority, Washington, Housing Revenue Bonds,
Varsity Village Project, Series 2001A:
1,000 5.500%, 12/01/27 - MBIA Insured 12/11 at 100.00 Aaa 1,075,010
2,000 5.600%, 12/01/36 - MBIA Insured 12/11 at 100.00 Aaa 2,159,940
1,500 Grays Harbor County Public Utility District 1, 1/11 at 100.00 AAA 1,574,670
Washington, Electric System Revenue Bonds,
Series 2001, 5.125%, 1/01/22 - AMBAC Insured
2,475 Klickitat County Public Utility District 1, 12/11 at 100.00 AAA 2,641,097
Washington, Electric Revenue Bonds, Series 2001B,
5.000%, 12/01/26 (Pre-refunded 12/01/11) - AMBAC Insured
12,955 Port of Seattle, Washington, Passenger Facility 12/08 at 101.00 AAA 13,420,214
Charge Revenue Bonds, Series 1998B, 5.300%,
12/01/16 - AMBAC Insured (Alternative Minimum Tax)
Port of Seattle, Washington, Revenue Bonds, Series 2001B:
2,535 5.625%, 4/01/18 - FGIC Insured (Alternative Minimum Tax) 10/11 at 100.00 AAA 2,723,553
16,000 5.100%, 4/01/24 - FGIC Insured (Alternative Minimum Tax) 10/08 at 100.00 AAA 16,225,120
2,090 Public Utility District 1, Benton County, Washington, 11/11 at 100.00 AAA 2,275,111
Electric Revenue Refunding Bonds, Series
2001A, 5.625%, 11/01/15 - FSA Insured
77
Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued)
Portfolio of INVESTMENTS October 31, 2006
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
$ 5,680 Seattle, Washington, Municipal Light and Power 3/11 at 100.00 AAA $ 6,074,987
Revenue Refunding and Improvement Bonds, Series
2001, 5.500%, 3/01/18 - FSA Insured
4,530 Tacoma, Washington, Solid Waste Utility Revenue 12/11 at 100.00 AAA 4,886,239
Refunding Bonds, Series 2001, 5.250%, 12/01/21
(Pre-refunded 12/01/11) - AMBAC Insured
3,720 Washington State Healthcare Facilities Authority, 10/11 at 100.00 Aaa 4,015,852
Revenue Bonds, Children's Hospital and
Regional Medical Center, Series 2001, 5.375%,
10/01/18 (Pre-refunded 10/01/11) - AMBAC Insured
Washington State Healthcare Facilities Authority, Revenue
Bonds, Good Samaritan Hospital, Series 2001:
5,480 5.500%, 10/01/21 - RAAI Insured 10/11 at 101.00 AA 5,877,081
25,435 5.625%, 10/01/31 - RAAI Insured 10/11 at 101.00 AA 27,289,212
Washington State Healthcare Facilities Authority, Revenue Bonds,
Group Health Cooperative of Puget Sound, Series 2001:
3,005 5.375%, 12/01/17 - AMBAC Insured 12/11 at 101.00 AAA 3,227,430
2,915 5.375%, 12/01/18 - AMBAC Insured 12/11 at 101.00 AAA 3,127,853
------------------------------------------------------------------------------------------------------------------------------------
91,320 Total Washington 96,593,369
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 4.4% (3.0% OF TOTAL INVESTMENTS)
Appleton, Wisconsin, Waterworks Revenue
Refunding Bonds, Series 2001:
3,705 5.375%, 1/01/20 - FGIC Insured 1/12 at 100.00 Aaa 3,991,508
1,850 5.000%, 1/01/21 - FGIC Insured 1/12 at 100.00 Aaa 1,956,283
1,735 Evansville Community School District, Dane, Green and Rock 4/11 at 100.00 AAA 1,872,481
Counties, Wisconsin, General Obligation Refunding Bonds, Series
2001, 5.500%, 4/01/20 (Pre-refunded 4/01/11) - FGIC Insured
12,250 La Crosse, Wisconsin, Pollution Control Revenue 12/08 at 102.00 AAA 12,929,875
Refunding Bonds, Dairyland Power Cooperative,
Series 1997B, 5.550%, 2/01/15 - AMBAC Insured
350 Wisconsin Health and Educational Facilities Authority, 10/11 at 101.00 AA- 375,827
Revenue Bonds, Froedtert and Community
Health Obligated Group, Series 2001, 5.375%, 10/01/30
3,650 Wisconsin Health and Educational Facilities Authority, 10/11 at 101.00 N/R (4) 3,960,615
Revenue Bonds, Froedtert and Community Health Obligated
Group, Series 2001, 5.375%, 10/01/30 (Pre-refunded 10/01/11)
2,500 Wisconsin Health and Educational Facilities
Authority, Revenue Bonds, Marshfield Clinic, 2/12 at 100.00 BBB+ 2,704,475
Series 2001B, 6.000%, 2/15/25
------------------------------------------------------------------------------------------------------------------------------------
26,040 Total Wisconsin 27,791,064
------------------------------------------------------------------------------------------------------------------------------------
$ 920,500 Total Municipal Bonds (cost $875,036,226) 926,154,854
============------------------------------------------------------------------------------------------------------------------------
78
SHARES DESCRIPTION (1) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 0.0% (0.0% OF TOTAL INVESTMENTS)
AIRLINES - 0.0% (0.0% OF TOTAL INVESTMENTS)
791 UAL Corporation (5)(7) $ 28,429
------------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (cost $24,879) 28,429
---------------------------------------------------------------------------------------------------------------------
Total Investments (cost $875,061,105) - 147.8% 926,183,283
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.0% 12,652,228
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.8)% (312,000,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 626,835,511
=====================================================================================================================
FORWARD SWAPS OUTSTANDING AT OCTOBER 31, 2006:
FUND FIXED RATE UNREALIZED
NOTIONAL FLOATING RATE PAY/RECEIVE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT INDEX FLOATING RATE (ANNUALIZED) FREQUENCY DATE (8) DATE (DEPRECIATION)
---------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch $26,750,00 3-Month USD-LIBOR Pay 5.184% Semi-Annually 10/30/07 10/30/16 $ 140,960
---------------------------------------------------------------------------------------------------------------------------------
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rates)
FUTURES CONTRACTS OUTSTANDING AT OCTOBER 31, 2006:
UNREALIZED
CONTRACT NUMBER OF CONTRACT ORIGINAL VALUE AT APPRECIATION
TYPE POSITION CONTRACTS EXPIRATION VALUE OCTOBER 31, 2006 (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
U.S. 30-Year Treasury Notes Long 159 12/06 $17,782,633 $17,912,344 $ 129,711
====================================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net
assets applicable to Common shares unless otherwise noted.
(2) Optional Call Provisions (not covered by the report of independent
registered public accounting firm): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other call
provisions at varying prices at later dates. Certain mortgage-backed
securities may be subject to periodic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's or Moody's
rating. Ratings below BBB by Standard & Poor's Group or Baa by Moody's
Investor Service, Inc. are considered to be below investment grade.
(4) Backed by an escrow or trust containing sufficient U.S. Government or
U.S. Government agency securities which ensure the timely payment of
principal and interest. Such investments are normally considered to be
equivalent to AAA rated securities.
(5) Non-income producing.
(6) On December 9, 2002, UAL Corporation ("UAL"), the holding company of
United Air Lines, Inc., filed for federal bankruptcy protection. The
Adviser determined that it was likely United would not remain current on
their interest payment obligations with respect to the bonds previously
held and thus the Fund had stopped accruing interest on its UAL bonds.
(7) On February 1, 2006, UAL emerged from federal bankruptcy with the
acceptance of its reorganization plan by the bankruptcy court. Under the
settlement agreement established to meet UAL's unsecured bond
obligations, the bondholders, including the Fund, received distributions
of UAL common stock over the subsequent months, and the bankruptcy court
dismissed all unsecured claims of bondholders, including those of the
Fund. On March 31, 2006 and April 13, 2006, the Fund liquidated such UAL
common stock holdings. On October 5, 2006, the Fund received an
additional distribution of UAL common stock as a result of its ownership
of UAL bonds, which it still held at October 31, 2006. Subsequent to
fiscal year-end, the Fund liquidated its UAL common stock holdings.
(8) Effective date represents the date on which both the Fund and
counterparty commence interest payment accruals on each forward swap
contract. N/R Not rated.
WI/DD Purchased on a when-issued or delayed delivery basis.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
79
Statement of
ASSETS AND LIABILITIES October 31, 2006
PERFORMANCE MUNICIPAL MARKET
PLUS ADVANTAGE OPPORTUNITY
(NPP) (NMA) (NMO)
-------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost
$1,303,450,908, $927,999,902
$991,270,192, $821,317,947,
$624,238,419 and $875,061,105,
respectively) $ 1,406,801,730 $ 1,006,727,683 $ 1,067,228,139
Cash -- -- --
Deposits with brokers for open
futures contracts -- -- --
Receivables:
Interest 20,354,169 16,250,336 15,983,266
Investments sold 707,817 74,885,545 170,000
Variation margin on futures contracts -- -- --
Unrealized appreciation on forward swaps -- -- --
Other assets 112,468 87,855 93,928
-------------------------------------------------------------------------------------------------------------
Total assets 1,427,976,184 1,097,951,419 1,083,475,333
-------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 2,560,051 3,805,173 999,910
Payable for investments purchased -- 51,564,798 --
Accrued expenses:
Management fees 723,677 534,777 554,399
Other 292,152 238,992 223,694
Preferred share dividends payable 178,075 133,133 138,069
-------------------------------------------------------------------------------------------------------------
Total liabilities 3,753,955 56,276,873 1,916,072
-------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 479,000,000 358,000,000 380,000,000
-------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 945,222,229 $ 683,674,546 $ 701,559,261
=============================================================================================================
Common shares outstanding 59,914,073 43,065,903 45,540,872
=============================================================================================================
Net asset value per Common share
outstanding (net assets applicable
to Common shares, divided by
Common shares outstanding) $ 15.78 $ 15.88 $ 15.41
=============================================================================================================
NET ASSETS APPLICABLE TO
COMMON SHARES CONSIST OF:
-------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 599,141 $ 430,659 $ 455,409
Paid-in surplus 836,423,631 601,673,644 635,499,922
Undistributed (Over-distribution of) net
investment income 1,230,581 2,927,826 919,444
Accumulated net realized gain (loss)
from investments and derivative transactions 3,618,054 (85,364) (11,273,461)
Net unrealized appreciation (depreciation)
of investments and derivative transactions 103,350,822 78,727,781 75,957,947
-------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $ 945,222,229 $ 683,674,546 $ 701,559,261
=============================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 200,000,000
Preferred 1,000,000 1,000,000 1,000,000
=============================================================================================================
DIVIDEND DIVIDEND DIVIDEND
ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NAD) (NXZ) (NZF)
-------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost
$1,303,450,908, $927,999,902
$991,270,192, $821,317,947,
$624,238,419 and $875,061,105,
respectively) $ 888,546,080 $ 680,892,560 $ 926,183,283
Cash -- 1,505,923 60,667
Deposits with brokers for open
futures contracts -- -- 10,461
Receivables:
Interest 12,716,081 11,307,407 14,858,791
Investments sold 15,764,372 4,005,394 4,768,806
Variation margin on futures contracts -- -- 119,250
Unrealized appreciation on forward swaps -- -- 140,960
Other assets 78,455 50,585 43,038
-------------------------------------------------------------------------------------------------------------
Total assets 917,104,988 697,761,869 946,185,256
-------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 2,235,783 -- --
Payable for investments purchased 8,912,198 5,178,245 6,773,411
Accrued expenses:
Management fees 351,783 212,997 285,486
Other 169,407 114,630 173,048
Preferred share dividends payable 119,956 66,706 117,800
-------------------------------------------------------------------------------------------------------------
Total liabilities 11,789,127 5,572,578 7,349,745
-------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 295,000,000 222,000,000 312,000,000
-------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 610,315,861 $ 470,189,291 $ 626,835,511
=============================================================================================================
Common shares outstanding 39,267,491 29,346,032 40,331,841
=============================================================================================================
Net asset value per Common share
outstanding (net assets applicable
to Common shares, divided by
Common shares outstanding) $ 15.54 $ 16.02 $ 15.54
=============================================================================================================
NET ASSETS APPLICABLE TO
COMMON SHARES CONSIST OF:
-------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 392,675 $ 293,460 $ 403,318
Paid-in surplus 558,149,941 417,184,977 573,181,990
Undistributed (Over-distribution of) net
investment income 1,374,504 1,988,926 962,737
Accumulated net realized gain (loss)
from investments and
derivative transactions (16,829,392) (5,932,213) 894,617
Net unrealized appreciation (depreciation)
of investments and derivative
transactions 67,228,133 56,654,141 51,392,849
-------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $ 610,315,861 $ 470,189,291 $ 626,835,511
=============================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited
=============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
80
Statement of
OPERATIONS Year Ended October 31, 2006
PERFORMANCE MUNICIPAL MARKET
PLUS ADVANTAGE OPPORTUNITY
(NPP) (NMA) (NMO)
-------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 70,383,602 $ 54,519,113 $ 54,633,443
-------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 8,507,546 6,300,897 6,525,239
Preferred shares - auction fees 1,198,070 895,425 950,418
Preferred shares - dividend
disbursing agent fees 50,000 50,000 40,000
Shareholders' servicing agent fees
and expenses 168,084 103,742 112,118
Custodian's fees and expenses 314,859 257,622 235,153
Directors'/Trustees' fees and expenses 32,407 23,523 23,929
Professional fees 63,762 54,942 42,535
Shareholders' reports - printing and
mailing expenses 126,850 95,246 99,399
Stock exchange listing fees 22,103 15,884 16,800
Investor relations expense 134,145 99,136 103,271
Other expenses 64,075 53,914 56,714
-------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee
credit, expense reimbursement
and legal fee refund 10,681,901 7,950,331 8,205,576
Custodian fee credit (125,173) (56,934) (75,010)
Expense reimbursement -- -- --
Legal fee refund -- (9,485) --
-------------------------------------------------------------------------------------------------------------
Net expenses 10,556,728 7,883,912 8,130,566
-------------------------------------------------------------------------------------------------------------
Net investment income 59,826,874 46,635,201 46,502,877
-------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments 3,609,041 (38,686) (3,186,736)
Change in net unrealized appreciation
(depreciation) of investments 18,585,165 11,410,086 18,252,758
Change in net unrealized appreciation
(depreciation) of futures -- -- --
Change in net unrealized appreciation
(depreciation) of forward swaps -- -- --
-------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 22,194,206 11,371,400 15,066,022
-------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (14,851,985) (11,096,228) (11,933,888)
From accumulated net realized gains (204,889) (95,203) --
-------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Preferred shareholders (15,056,874) (11,191,431) (11,933,888)
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations $ 66,964,206 $ 46,815,170 $ 49,635,011
=============================================================================================================
DIVIDEND DIVIDEND DIVIDEND
ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NAD) (NXZ) (NZF)
-------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 45,958,483 $ 36,217,116 $ 47,234,239
-------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 5,485,410 4,228,760 5,696,085
Preferred shares - auction fees 737,955 553,679 780,307
Preferred shares - dividend
disbursing agent fees 30,000 30,000 30,000
Shareholders' servicing agent fees
and expenses 16,247 6,597 8,677
Custodian's fees and expenses 191,350 134,735 226,548
Directors'/Trustees' fees and expenses 19,277 15,264 20,741
Professional fees 54,231 35,898 42,843
Shareholders' reports - printing and
mailing expenses 77,901 56,746 75,531
Stock exchange listing fees 14,504 3,629 3,429
Investor relations expense 85,550 66,671 85,077
Other expenses 40,463 33,001 35,991
-------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee
credit, expense reimbursement
and legal fee refund 6,752,888 5,164,980 7,005,229
Custodian fee credit (98,224) (80,443) (26,719)
Expense reimbursement (1,676,403) (1,856,261) (2,749,865)
Legal fee refund (13,354) (3,329) --
-------------------------------------------------------------------------------------------------------------
Net expenses 4,964,907 3,224,947 4,228,645
-------------------------------------------------------------------------------------------------------------
Net investment income 40,993,576 32,992,169 43,005,594
-------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments 4,172,514 (1,053,678) 1,509,431
Change in net unrealized appreciation
(depreciation) of investments 8,567,260 10,301,195 10,632,281
Change in net unrealized appreciation
(depreciation) of futures -- -- 129,711
Change in net unrealized appreciation
(depreciation) of forward swaps -- -- 140,960
-------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 12,739,774 9,247,517 12,412,383
-------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (9,396,656) (7,047,610) (9,830,888)
From accumulated net realized gains -- -- --
-------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Preferred shareholders (9,396,656) (7,047,610) (9,830,888)
-------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations $ 44,336,694 $ 35,192,076 $ 45,587,089
=============================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
81
Statement of
CHANGES IN NET ASSETS
PERFORMANCE PLUS (NPP) MUNICIPAL ADVANTAGE (NMA)
---------------------------------- -----------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/06 10/31/05 10/31/06 10/31/05
--------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 59,826,874 $ 61,211,198 $ 46,635,201 $ 46,918,021
Net realized gain (loss) from investments 3,609,041 1,174,258 (38,686) 739,548
Net realized gain (loss) from forward swaps -- -- -- --
Change in net unrealized appreciation
(depreciation) of investments 18,585,165 (16,746,198) 11,410,086 (10,417,790)
Change in net unrealized appreciation
(depreciation) of futures -- -- -- --
Change in net unrealized appreciation
(depreciation) of forward swaps -- -- -- --
Distributions to Preferred shareholders:
From net investment income (14,851,985) (9,513,192) (11,096,228) (6,994,789)
From accumulated net realized gains (204,889) (69,318) (95,203) (47,587)
--------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 66,964,206 36,056,748 46,815,170 30,197,403
--------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (50,243,956) (56,600,807) (38,834,236) (43,068,628)
From accumulated net realized gains (1,042,505) (904,764) (628,192) (641,084)
--------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (51,286,461) (57,505,571) (39,462,428) (43,709,712)
--------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions -- -- 643,731 --
--------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from capital share transactions -- -- 643,731 --
--------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 15,677,745 (21,448,823) 7,996,473 (13,512,309)
Net assets applicable to Common
shares at the beginning of year 929,544,484 950,993,307 675,678,073 689,190,382
--------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $ 945,222,229 $ 929,544,484 $ 683,674,546 $ 675,678,073
================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of year $ 1,230,581 $ 6,510,536 $ 2,927,826 $ 6,201,663
================================================================================================================================
MARKET OPPORTUNITY (NMO)
-----------------------------------
YEAR YEAR
ENDED ENDED
10/31/06 10/31/05
------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 46,502,877 $ 46,851,160
Net realized gain (loss) from investments (3,186,736) 6,140,447
Net realized gain (loss) from forward swaps -- --
Change in net unrealized appreciation
(depreciation) of investments 18,252,758 (18,854,854)
Change in net unrealized appreciation
(depreciation) of futures -- --
Change in net unrealized appreciation
(depreciation) of forward swaps -- --
Distributions to Preferred shareholders:
From net investment income (11,933,888) (7,453,196)
From accumulated net realized gains -- --
------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 49,635,011 26,683,557
------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (37,757,943) (41,760,989)
From accumulated net realized gains -- --
------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (37,757,943) (41,760,989)
------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions -- --
------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from capital share transactions -- --
------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 11,877,068 (15,077,432)
Net assets applicable to Common
shares at the beginning of year 689,682,193 704,759,625
------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $ 701,559,261 $ 689,682,193
==========================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of year $ 919,444 $ 4,150,977
==========================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
82
DIVIDEND ADVANTAGE (NAD) DIVIDEND ADVANTAGE 2 (NXZ)
---------------------------------- -----------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/06 10/31/05 10/31/06 10/31/05
--------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 40,993,576 $ 41,783,665 $ 32,992,169 $ 33,182,825
Net realized gain (loss) from investments 4,172,514 (176,759) (1,053,678) 365,453
Net realized gain (loss) from forward swaps -- -- -- (5,034,851)
Change in net unrealized appreciation
(depreciation) of investments 8,567,260 (10,221,934) 10,301,195 7,731,035
Change in net unrealized appreciation
(depreciation) of futures -- -- -- --
Change in net unrealized appreciation
(depreciation) of forward swaps -- -- -- 3,532,408
Distributions to Preferred shareholders:
From net investment income (9,396,656) (5,755,365) (7,047,610) (4,391,879)
From accumulated net realized gains -- -- -- --
--------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 44,336,694 25,629,607 35,192,076 35,384,991
--------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (33,907,479) (39,071,157) (28,774,873) (30,220,159)
From accumulated net realized gains -- -- -- --
--------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (33,907,479) (39,071,157) (28,774,873) (30,220,159)
--------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions -- -- 909,885 145,668
--------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from capital share transactions -- -- 909,885 145,668
--------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 10,429,215 (13,441,550) 7,327,088 5,310,500
Net assets applicable to Common
shares at the beginning of year 599,886,646 613,328,196 462,862,203 457,551,703
--------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $ 610,315,861 $ 599,886,646 $ 470,189,291 $ 462,862,203
================================================================================================================================
Undistributed (Over-distribution of)
net investment income at
the end of ye $ 1,374,504 $ 3,699,460 $ 1,988,926 $ 4,862,141
================================================================================================================================
DIVIDEND ADVANTAGE 3 (NZF)
-----------------------------------
YEAR YEAR
ENDED ENDED
10/31/06 10/31/05
------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 43,005,594 $ 42,749,145
Net realized gain (loss) from investments 1,509,431 60,740
Net realized gain (loss) from forward swaps -- --
Change in net unrealized appreciation
(depreciation) of investments 10,632,281 133,784
Change in net unrealized appreciation
(depreciation) of futures 129,711 --
Change in net unrealized appreciation
(depreciation) of forward swaps 140,960 --
Distributions to Preferred shareholders:
From net investment income (9,830,888) (6,046,697)
From accumulated net realized gains -- --
------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 45,587,089 36,896,972
------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (36,446,494) (38,657,406)
From accumulated net realized gains -- --
------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (36,446,494) (38,657,406)
------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions 337,160 --
------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from capital share transactions 337,160 --
------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 9,477,755 (1,760,434)
Net assets applicable to Common
shares at the beginning of year 617,357,756 619,118,190
------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $ 626,835,511 $ 617,357,756
==========================================================================================
Undistributed (Over-distribution of)
net investment income at
the end of ye $ 962,737 $ 4,240,488
==========================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
83
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The funds (the "Funds") covered in this report and their corresponding Common
share stock exchange symbols are Nuveen Performance Plus Municipal Fund, Inc.
(NPP), Nuveen Municipal Advantage Fund, Inc. (NMA), Nuveen Municipal Market
Opportunity Fund, Inc. (NMO), Nuveen Dividend Advantage Municipal Fund (NAD),
Nuveen Dividend Advantage Municipal Fund 2 (NXZ) and Nuveen Dividend Advantage
Municipal Fund 3 (NZF). Performance Plus (NPP), Municipal Advantage (NMA),
Market Opportunity (NMO) and Dividend Advantage (NAD) are traded on the New York
Stock Exchange while Dividend Advantage 2 (NXZ) and Dividend Advantage 3 (NZF)
are traded on the American Stock Exchange. The Funds are registered under the
Investment Company Act of 1940, as amended, as closed-end, diversified
management investment companies.
Each Fund seeks to provide current income exempt from regular federal income tax
by investing primarily in a diversified portfolio of municipal obligations
issued by state and local government authorities or certain U.S. territories.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with U.S.
generally accepted accounting principles.
INVESTMENT VALUATION
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
market price quotes are not readily available (which is usually the case for
municipal securities), the pricing service establishes fair value based on
yields or prices of municipal bonds of comparable quality, type of issue,
coupon, maturity and rating, indications of value from securities dealers,
evaluations of anticipated cash flows or collateral and general market
conditions. Prices of forward swap contracts are also provided by an independent
pricing service approved by each Fund's Board of Directors/Trustees. Futures
contracts are valued using the closing settlement price, or, in the absence of
such a price, at the mean of the bid and asked prices. If the pricing service is
unable to supply a price for a municipal bond, forward swap contract or futures
contract, each Fund may use a market price or fair market value quote provided
by a major broker/dealer in such investments. If it is determined that the
market price or fair market value for an investment is unavailable or
inappropriate, the Board of Directors/Trustees of the Funds, or its designee,
may establish a fair value for the investment. Exchange-listed securities are
generally valued at the last sales price on the securities exchange on which
such securities are primarily traded. Securities traded on a securities exchange
for which there are no transactions on a given day or securities not listed on a
securities exchange are valued at the mean of the closing bid and asked prices.
Securities traded on Nasdaq are valued at the Nasdaq Official Closing Price.
Temporary investments in securities that have variable rate and demand features
qualifying them as short-term investments are valued at amortized cost, which
approximates market value.
INVESTMENT TRANSACTIONS
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued or delayed delivery basis may have
extended settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued/delayed delivery purchase commitments. At October 31, 2006,
Municipal Advantage (NMA), Dividend Advantage (NAD), Dividend Advantage 2 (NXZ)
and Dividend Advantage 3 (NZF) had outstanding when-issued/delayed delivery
purchase commitments of $21,251,553, $3,587,721, $1,172,852 and $2,005,021,
respectively. There were no such outstanding purchase commitments in either
Performance Plus (NPP) or Market Opportunity (NMO) at October 31, 2006.
INVESTMENT INCOME
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any. Dividend
income, if any, is recorded on the ex-dividend date.
PROFESSIONAL FEES
Professional fees presented in the Statement of Operations consist of legal fees
incurred in the normal course of operations, audit fees, tax consulting fees
and, in some cases, workout expenditures. Workout expenditures are incurred in
an attempt to protect or enhance an investment, or to pursue other claims or
legal actions on behalf of Fund shareholders. Legal fee refunds presented on the
Statement of Operations for Municipal Advantage (NMA), Dividend Advantage (NAD)
and Dividend Advantage 2 (NXZ) reflect a refund of workout expenditures paid in
a prior reporting period.
84
FEDERAL INCOME TAXES
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all net investment income and net capital
gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal income tax, to retain
such tax-exempt status when distributed to shareholders of the Funds. All
monthly tax-exempt income dividends paid during the fiscal year ended October
31, 2006, have been designated Exempt Interest Dividends. Net realized capital
gains and ordinary income distributions paid by the Funds are subject to federal
taxation.
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from U.S.
generally accepted accounting principles.
PREFERRED SHARES
The Funds have issued and outstanding Preferred shares, $25,000 stated value per
share, as a means of effecting financial leverage. Each Fund's Preferred shares
are issued in more than one Series. The dividend rate paid by the Funds on each
Series is determined every seven days, pursuant to a dutch auction process
overseen by the auction agent, and is payable at the end of each rate period.
The number of Preferred shares outstanding, by Series and in total, for each
Fund is as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
----------------------------------------------------------------------------------------------------
Number of shares:
Series M 4,000 3,000 4,000 4,000 3,000 --
Series T 4,000 3,000 4,000 4,000 3,000 --
Series W 4,000 3,000 3,200 -- -- 4,160
Series TH 3,160 2,320 -- 3,800 -- 4,160
Series F 4,000 3,000 4,000 -- 2,880 4,160
----------------------------------------------------------------------------------------------------
Total 19,160 14,320 15,200 11,800 8,880 12,480
====================================================================================================
INVERSE FLOATING RATE SECURITIES
The Funds are authorized to invest in inverse floating rate securities. During
the year ended October 31, 2006, Municipal Advantage (NMA), Market Opportunity
(NMO), Dividend Advantage (NAD), Dividend Advantage 2 (NXZ) and Dividend
Advantage 3 (NZF) invested in inverse floating rate securities for the purpose
of enhancing portfolio yield. Inverse floating rate securities are identified in
the Portfolio of Investments and are valued daily. The interest rate of an
inverse floating rate security has an inverse relationship to the interest rate
of a short-term floating rate security. Consequently, as the interest rate of
the floating rate security rises, the interest rate on the inverse floating rate
security declines. Conversely, as the interest rate of the floating rate
security declines, the interest rate on the inverse floating rate security
rises. The price of an inverse floating rate security will be more volatile than
that of an otherwise comparable fixed rate security since the interest rate is
dependent on an underlying fixed coupon rate or the general level of long-term
interest rates as well as the short-term interest paid on the floating rate
security, and because the inverse floating rate security typically bears the
risk of loss of a greater face value of an underlying bond. Performance Plus
(NPP) did not invest in any such securities during the year ended October 31,
2006.
FORWARD SWAP TRANSACTIONS
The Funds are authorized to invest in certain derivative financial instruments.
The Funds' use of forward interest rate swap transactions is intended to help
the Fund manage its overall interest rate sensitivity, either shorter or longer,
generally to more closely align the Fund's interest rate sensitivity with that
of the broader municipal market. Forward interest rate swap transactions involve
each Fund's agreement with a counterparty to pay, in the future, a fixed or
variable rate payment in exchange for the counterparty paying the Fund a
variable or fixed rate payment, the accruals for which would begin at a
specified date in the future (the "effective date"). The amount of the payment
obligation is based on the notional amount of the forward swap contract and the
termination date of the swap (which is akin to a bond's maturity). The value of
the Fund's swap commitment would increase or decrease based primarily on the
extent to which long-term interest rates for bonds having a maturity of the
swap's termination date increases or decreases. The Funds may terminate a swap
contract prior to the effective date, at which point a realized gain or loss is
recognized. When a forward swap is terminated, it ordinarily does not involve
the delivery of securities or other underlying assets or principal, but rather
is settled in cash on a net basis. Each Fund intends, but is not obligated, to
terminate its forward swaps before the effective date. Accordingly, the risk of
loss with respect to the swap counterparty on such transactions is limited to
the credit risk associated with a counterparty failing to honor its commitment
to pay any realized gain to the Fund upon termination. To reduce such credit
risk, all counterparties are required to pledge collateral daily (based on the
daily valuation of each swap) on behalf of each Fund with a value approximately
equal to the amount of any unrealized gain above a pre-determined threshold.
Reciprocally, when any of the Funds have an unrealized loss on a swap contract,
the Funds have instructed the custodian to pledge assets of the Funds as
collateral with a value approximately equal to the amount of the unrealized loss
above a pre-determined threshold. Collateral pledges are monitored and
subsequently adjusted if and when the swap valuations fluctuate, either up or
down, by at least the predetermined threshold amount.
85
Notes to
FINANCIAL STATEMENTS (continued)
FUTURES CONTRACTS
The Funds are authorized to invest in futures contracts. Upon entering into a
futures contract, a Fund is required to deposit with th broker an amount of cash
or liquid securities equal to a specified percentage of the contract amount.
This is known as the "initial margin." Subsequent payments ("variation margin")
are made or received by a Fund each day, depending on the daily fluctuation of
the value of the contract.
During the period the futures contract is open, changes in the value of the
contract are recognized as an unrealized gain or loss by "marking-to-market" on
a daily basis to reflect the changes in market value of the contract. When the
contract is closed or expired, a Fund records a realized gain or loss equal to
the difference between the value of the contract on the closing date and value
of the contract when originally entered into. Cash held by the broker to cover
initial margin requirements on open futures contracts is noted in the Statement
of Assets and Liabilities. Additionally, the Statement of Assets and Liabilities
reflects a receivable or payable for the variation margin as of October 31,
2006.
Risks of investments in futures contracts include the possible adverse movement
of the securities or indices underlying the contracts, the possibility that
there may not be a liquid secondary market for the contracts and/or that a
change in the value of the contract may not correlate with a change in the value
of the underlying securities or indices.
CUSTODIAN FEE CREDIT
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
INDEMNIFICATIONS
Under the Funds' organizational documents, their Officers and Director/Trustees
are indemnified against certain liabilities arising out of the performance of
their duties to the Funds. In addition, in the normal course of business, the
Funds enter into contracts that provide general indemnifications to other
parties. The Funds' maximum exposure under these arrangements is unknown as this
would involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
2. FUND SHARES
Transactions in Common shares were as follows:
MUNICIPAL MARKET
PERFORMANCE PLUS (NPP) ADVANTAGE (NMA) OPPORTUNITY (NMO)
---------------------- ------------------------ ------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/06 10/31/05 10/31/06 10/31/05 10/31/06 10/31/05
-------------------------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due to
reinvestment of distributions -- -- 40,309 -- -- --
=========================================================================================================================
DIVIDEND DIVIDEND DIVIDEND
ADVANTAGE (NAD) ADVANTAGE 2 (NXZ) ADVANTAGE 3 (NZF)
---------------------- ------------------------ ------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/06 10/31/05 10/31/06 10/31/05 10/31/06 10/31/05
-------------------------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due to
reinvestment of distributions -- -- 55,164 8,868 21,722 --
=========================================================================================================================
86
3. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments
and derivative transactions) during the fiscal year ended October 31, 2006, were
as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
--------------------------------------------------------------------------------------------------------------------------------
Purchases $ 124,700,213 $ 110,329,689 $143,527,048 $ 73,599,563 $ 30,502,860 $ 87,150,874
Sales and maturities 130,956,915 134,169,212 146,276,417 71,583,836 35,008,446 89,194,902
================================================================================================================================
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to the treatment of paydown gains and losses, timing differences
in recognizing taxable market discount and timing differences in recognizing
certain gains and losses on investment transactions. To the extent that
differences arise that are permanent in nature, such amounts are reclassified
within the capital accounts on the Statement of Assets and Liabilities presented
in the annual report, based on their Federal tax basis treatment; temporary
differences do not require reclassification. Temporary and permanent differences
do not impact the net asset values of the Funds.
At October 31, 2006, the cost of investments was as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
--------------------------------------------------------------------------------------------------------------------------------
Cost of investments $1,302,691,978 $ 926,556,989 $990,943,730 $820,149,454 $625,826,312 $874,774,926
================================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 2006, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
--------------------------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 104,622,164 $ 80,233,431 $ 80,162,904 $ 68,571,746 $ 58,673,722 $ 52,710,665
Depreciation (512,412) (62,737) (3,878,495) (175,120) (3,607,474) (1,302,308)
--------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) of investments $ 104,109,752 $ 80,170,694 $ 76,284,409 $ 68,396,626 $ 55,066,248 $ 51,408,357
================================================================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at October 31, 2006, the Funds' tax year end,
were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
--------------------------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt
income * $ 4,425,692 $ 4,620,835 $ 3,659,265 $ 2,916,963 $ 3,653,096 $ 3,738,588
Undistributed net ordinary
income ** 58,535 26,427 77,487 118,459 23,339 --
Undistributed net long-term
capital gains 3,618,054 -- -- -- -- 1,024,327
================================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on October 2, 2006, paid on November 1, 2006.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the tax years ended October 31,
2006 and October 31, 2005, was designated for purposes of the dividends paid
deduction as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2006 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
--------------------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt
income $ 65,689,928 $ 50,218,101 $ 49,767,991 $ 43,683,872 $ 36,096,315 $ 46,380,901
Distributions from net ordinary
income ** 6,686 154,403 196,171 -- -- --
Distributions from net long-term
capital gains*** 1,247,394 593,511 -- -- -- --
================================================================================================================================
87
Notes to
FINANCIAL STATEMENTS (continued)
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2005 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
--------------------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt
income $ 66,204,330 $ 50,312,299 $ 49,472,483 $ 45,021,305 $ 34,591,779 $ 44,838,770
Distributions from net ordinary
income ** 238,651 -- -- -- -- --
Distributions from net long-term
capital gains 974,082 688,671 -- -- -- --
================================================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
*** The Funds designated as a long-term capital gain dividend, pursuant to
Internal Revenue Code Section 852(b)(3), the amount necessary to reduce
the earnings and profits of the Funds related to net capital gain to zero
for the tax year ended October 31, 2006.
At October 31, 2006, the following Funds had unused capital loss carryforwards
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryforwards will expire as follows:
MUNICIPAL MARKET DIVIDEND DIVIDEND
ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2
(NMA) (NMO) (NAD) (NXZ)
-------------------------------------------------------------------------------------------------------------------------------
Expiration year:
2008 $ -- $ -- $12,130,329 $ --
2009 -- -- -- --
2010 -- -- -- --
2011 -- 7,158,110 4,594,300 --
2012 -- 973,824 -- 246,691
2013 -- -- 104,762 1,591,323
2014 35,364 3,141,529 -- 1,882,135
-------------------------------------------------------------------------------------------------------------------------------
Total $ 35,364 $11,273,463 $16,829,391 $ 3,720,149
===============================================================================================================================
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by Nuveen
Asset Management (the "Adviser"), a wholly owned subsidiary of Nuveen
Investments, Inc., ("Nuveen"), and a specific fund-level component, based only
on the amount of assets within each individual Fund. This pricing structure
enables Nuveen fund shareholders to benefit from growth in the assets within
each individual fund as well as from growth in the amount of complex-wide assets
managed by the Adviser.
The annual fund-level fee, payable monthly, for each Fund is based upon the
average daily net assets (including net assets attributable to Preferred shares)
of each Fund as follows:
PERFORMANCE PLUS (NPP)
MUNICIPAL ADVANTAGE (NMA)
MARKET OPPORTUNITY (NMO)
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For the next $3 billion .3875
For net assets over $5 billion .3750
================================================================================================================================
88
DIVIDEND ADVANTAGE (NAD)
DIVIDEND ADVANTAGE 2 (NXZ)
DIVIDEND ADVANTAGE 3 (NZF)
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For net assets over $2 billion .3750
================================================================================================================================
The annual complex-level fee, payable monthly, which is additive to the
fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the
aggregate amount of total fund assets managed as stated in the table below. As
of October 31, 2006, the complex-level fee rate was .1852%.
COMPLEX-LEVEL ASSETS (1) COMPLEX-LEVEL FEE RATE
--------------------------------------------------------------------------------------------------------------------------------
For the first $55 billion .2000%
For the next $1 billion .1800
For the next $1 billion .1600
For the next $3 billion .1425
For the next $3 billion .1325
For the next $3 billion .1250
For the next $5 billion .1200
For the next $5 billion .1175
For the next $15 billion .1150
For Managed Assets over $91 billion (2) .1400
================================================================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets" means
the average daily net assets of each fund including assets attributable to
all types of leverage used by the Nuveen funds) of Nuveen-sponsored funds
in the U.S.
(2) With respect to the complex-wide Managed Assets over $91 billion, the fee
rate or rates that will apply to such assets will be determined at a later
date. In the unlikely event that complex-wide Managed Assets reach $91
billion prior to a determination of the complex-level fee rate or rates to
be applied to Managed Assets in excess of $91 billion, the complex-level
fee rate for such complex-wide Managed Assets shall be .1400% until such
time as a different rate or rates is determined.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors/Trustees who are affiliated with
the Adviser or to its Officers, all of whom receive remuneration for their
services to the Funds from the Adviser or its affiliates. The Board of
Directors/Trustees has adopted a deferred compensation plan for independent
Directors/Trustees that enables Directors/Trustees to elect to defer receipt of
all or a portion of the annual compensation they are entitled to receive from
certain Nuveen advised funds. Under the plan, deferred amounts are treated as
though equal dollar amounts had been invested in shares of select Nuveen advised
funds.
For the first ten years of Dividend Advantage's (NAD) operations, the Adviser
has agreed to reimburse the Fund, as a percentage of average daily net assets
(including net assets attributable to Preferred shares), for fees and expenses
in the amounts and for the time periods set forth below:
YEAR ENDING
JULY 31,
-----------------------------------------------------
1999* .30%
2000 .30
2001 .30
2002 .30
2003 .30
2004 .30
2005 .25%
2006 .20
2007 .15
2008 .10
2009 .05
=====================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Dividend Advantage (NAD) for any portion
of its fees and expenses beyond July 31, 2009.
For the first ten years of Dividend Advantage 2's (NXZ) operations, the Adviser
has agreed to reimburse the Fund, as a percentage of average daily net assets
(including net assets attributable to Preferred shares), for fees and expenses
in the amounts and for the time periods set forth below:
YEAR ENDING
MARCH 31,
-----------------------------------------------------
2001* .30%
2002 .30
2003 .30
2004 .30
2005 .30
2006 .30
2007 .25%
2008 .20
2009 .15
2010 .10
2011 .05
=====================================================
* From the commencement of operations.
89
Notes to
FINANCIAL STATEMENTS (continued)
The Adviser has not agreed to reimburse Dividend Advantage 2 (NXZ) for any
portion of its fees and expenses beyond March 31, 2011.
For the first ten years of Dividend Advantage 3's (NZF) operations, the Adviser
has agreed to reimburse the Fund, as a percentage of average daily net assets
(including net assets attributable to Preferred shares), for fees and expenses
in the amounts and for the time periods set forth below:
YEAR ENDING
SEPTEMBER 30,
-----------------------------------------------------
2001* .30%
2002 .30
2003 .30
2004 .30
2005 .30
2006 .30
2007 .25%
2008 .20
2009 .15
2010 .10
2011 .05
=====================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Dividend Advantage 3 (NZF) for any
portion of its fees and expenses beyond September 30, 2011.
6. NEW ACCOUNTING PRONOUNCEMENTS
FINANCIAL ACCOUNTING STANDARDS BOARD INTERPRETATION NO. 48
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES (FIN 48). FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is
required for fiscal years beginning after December 15, 2006 and is to be applied
to all open tax years as of the effective date. At this time, management is
evaluating the implications of FIN 48 and does not expect the adoption of FIN 48
will have a significant impact on the net assets or results of operations of the
Funds.
FINANCIAL ACCOUNTING STANDARDS BOARD STATEMENT ON FINANCIAL ACCOUNTING STANDARDS
NO. 157
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and interim periods within those fiscal years.
The changes to current generally accepted accounting principles from the
application of this standard relate to the definition of fair value, the methods
used to measure fair value, and the expanded disclosures about fair value
measurements. As of October 31, 2006, the Funds do not believe the adoption of
SFAS No. 157 will impact the financial statement amounts; however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements included within the Statement of
Operations for the period.
7. SUBSEQUENT EVENT
DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on December 1, 2006, to shareholders of record
on November 15, 2006, as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND
PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPP) (NMA) (NMO) (NAD) (NXZ) (NZF)
--------------------------------------------------------------------------------------------------------------------------------
Dividend per share $.0640 $.0715 $.0660 $.0690 $.0765 $.0730
================================================================================================================================
90
Financial
HIGHLIGHTS
91
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
---------------------------------------------------------------- -------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
-------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE PLUS (NPP)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 $15.51 $1.00 $ .38 $(.25) $ -- $1.13 $ (.84) $(.02) $ (.86)
2005 15.87 1.02 (.26) (.16) -- .60 (.94) (.02) (.96)
2004 15.45 1.04 .42 (.07) -- 1.39 (.97) -- (.97)
2003 15.38 1.07 .05 (.07) -- 1.05 (.95) (.03) (.98)
2002 15.57 1.09 (.22) (.10) (.01) .76 (.90) (.04) (.94)
MUNICIPAL ADVANTAGE (NMA)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 15.70 1.08 .27 (.26) -- 1.09 (.90) (.01) (.91)
2005 16.02 1.09 (.24) (.16) -- .69 (1.00) (.01) (1.01)
2004 15.62 1.11 .41 (.08) -- 1.44 (1.03) (.01) (1.04)
2003 15.41 1.13 .25 (.07) (.01) 1.30 (1.02) (.07) (1.09)
2002 15.65 1.15 (.22) (.10) (.03) .80 (.94) (.10) (1.04)
MARKET OPPORTUNITY (NMO)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 15.14 1.02 .34 (.26) -- 1.10 (.83) -- (.83)
2005 15.48 1.03 (.29) (.16) -- .58 (.92) -- (.92)
2004 15.11 1.03 .37 (.08) -- 1.32 (.95) -- (.95)
2003 14.60 1.03 .50 (.08) -- 1.45 (.94) -- (.94)
2002 15.24 1.11 (.70) (.11) (.01) .29 (.91) (.02) (.93)
DIVIDEND ADVANTAGE (NAD)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 15.28 1.04 .32 (.24) -- 1.12 (.86) -- (.86)
2005 15.62 1.06 (.25) (.15) -- .66 (1.00) -- (1.00)
2004 15.17 1.09 .46 (.07) -- 1.48 (1.03) -- (1.03)
2003 14.94 1.10 .19 (.07) -- 1.22 (.99) -- (.99)
2002 14.84 1.13 .01 (.10) -- 1.04 (.94) -- (.94)
DIVIDEND ADVANTAGE 2 (NXZ)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 15.80 1.12 .32 (.24) -- 1.20 (.98) -- (.98)
2005 15.63 1.13 .22 (.15) -- 1.20 (1.03) -- (1.03)
2004 15.13 1.12 .51 (.07) -- 1.56 (1.03) (.03) (1.06)
2003 14.89 1.16 .17 (.07) -- 1.26 (1.01) (.01) (1.02)
2002 15.07 1.15 (.32) (.10) -- .73 (.91) (.01) (.92)
DIVIDEND ADVANTAGE 3 (NZF)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 15.32 1.07 .29 (.24) -- 1.12 (.90) -- (.90)
2005 15.36 1.06 .01 (.15) -- .92 (.96) -- (.96)
2004 14.74 1.06 .59 (.07) -- 1.58 (.96) -- (.96)
2003 14.56 1.07 .10 (.07) -- 1.10 (.93) -- (.93)
2002 14.47 1.03 .16 (.10) -- 1.09 (.91) -- (.91)
===============================================================================================================================
Total Returns
--------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value* Value*
--------------------------------------------------------------------------------------
PERFORMANCE PLUS (NPP)
--------------------------------------------------------------------------------------
Year Ended 10/31:
2006 $ -- $15.78 $15.09 10.78% 7.50%
2005 -- 15.51 14.43 3.02 3.83
2004 -- 15.87 14.95 9.10 9.30
2003 -- 15.45 14.64 9.58 6.97
2002 (.01) 15.38 14.28 4.51 5.03
MUNICIPAL ADVANTAGE (NMA)
--------------------------------------------------------------------------------------
Year Ended 10/31:
2006 -- 15.88 15.85 10.68 7.16
2005 -- 15.70 15.19 3.29 4.42
2004 -- 16.02 15.70 8.82 9.57
2003 -- 15.62 15.44 13.17 8.71
2002 -- 15.41 14.66 5.89 5.39
MARKET OPPORTUNITY (NMO)
--------------------------------------------------------------------------------------
Year Ended 10/31:
2006 -- 15.41 15.00 11.92 7.49
2005 -- 15.14 14.19 4.70 3.78
2004 -- 15.48 14.44 7.97 9.00
2003 -- 15.11 14.29 10.62 10.24
2002 -- 14.60 13.80 .49 2.03
DIVIDEND ADVANTAGE (NAD)
--------------------------------------------------------------------------------------
Year Ended 10/31:
2006 -- 15.54 15.30 11.19 7.59
2005 -- 15.28 14.58 1.77 4.27
2004 -- 15.62 15.31 8.37 10.06
2003 -- 15.17 15.12 11.41 8.41
2002 -- 14.94 14.50 2.01 7.26
DIVIDEND ADVANTAGE 2 (NXZ)
--------------------------------------------------------------------------------------
Year Ended 10/31:
2006 -- 16.02 16.50 11.95 7.86
2005 -- 15.80 15.64 8.58 7.83
2004 -- 15.63 15.38 11.16 10.67
2003 -- 15.13 14.85 14.39 8.67
2002 .01 14.89 13.91 (.81) 5.16
DIVIDEND ADVANTAGE 3 (NZF)
--------------------------------------------------------------------------------------
Year Ended 10/31:
2006 -- 15.54 15.88 16.90 7.57
2005 -- 15.32 14.41 6.11 6.09
2004 -- 15.36 14.50 12.45 11.10
2003 .01 14.74 13.80 9.04 7.82
2002 (.09) 14.56 13.53 (4.26) 7.20
======================================================================================
Ratios/Supplemental Data
---------------------------------------------------------------------------------
Before Credit/ After Credit/
Reimbursement/Refund Reimbursement/Refund**
------------------------- -------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
------------------------------------------------------------------------------------------------------------
PERFORMANCE PLUS (NPP)
------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 $945,222 1.15% 6.44% 1.14% 6.45% 9%
2005 929,544 1.15 6.45 1.14 6.46 6
2004 950,993 1.17 6.69 1.17 6.70 11
2003 925,525 1.18 6.89 1.18 6.90 10
2002 921,376 1.18 7.11 1.17 7.12 11
MUNICIPAL ADVANTAGE (NMA)
------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 683,675 1.18 6.92 1.17 6.93 11
2005 675,678 1.17 6.81 1.16 6.82 8
2004 689,190 1.19 7.00 1.18 7.00 4
2003 671,147 1.21 7.27 1.20 7.27 7
2002 662,270 1.22 7.55 1.22 7.55 17
MARKET OPPORTUNITY (NMO)
------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 701,559 1.19 6.73 1.18 6.74 14
2005 689,682 1.19 6.66 1.18 6.67 7
2004 704,760 1.21 6.75 1.19 6.77 4
2003 687,955 1.25 6.94 1.25 6.94 9
2002 664,914 1.24 7.50 1.24 7.51 13
DIVIDEND ADVANTAGE (NAD)
------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 610,316 1.12 6.54 .83 6.83 8
2005 599,887 1.17 6.48 .80 6.84 11
2004 613,328 1.14 6.69 .70 7.12 7
2003 595,266 1.35 6.78 .89 7.24 3
2002 586,045 1.25 7.24 .80 7.70 7
DIVIDEND ADVANTAGE 2 (NXZ)
------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 470,189 1.11 6.70 .70 7.11 5
2005 462,862 1.12 6.66 .67 7.12 2
2004 457,552 1.14 6.87 .69 7.32 3
2003 443,101 1.17 7.20 .71 7.66 11
2002 435,907 1.17 7.32 .70 7.79 9
DIVIDEND ADVANTAGE 3 (NZF)
------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2006 626,836 1.13 6.51 .68 6.96 9
2005 617,358 1.13 6.39 .68 6.84 3
2004 619,118 1.15 6.64 .69 7.10 3
2003 594,154 1.17 6.80 .71 7.26 3
2002 586,799 1.17 6.78 .70 7.25 7
============================================================================================================
Preferred Shares at End of Period
-------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
------------------------------------------------------------------
PERFORMANCE PLUS (NPP)
------------------------------------------------------------------
Year Ended 10/31:
2006 $479,000 $25,000 $74,333
2005 479,000 25,000 73,515
2004 479,000 25,000 74,634
2003 479,000 25,000 73,305
2002 479,000 25,000 73,089
MUNICIPAL ADVANTAGE (NMA)
------------------------------------------------------------------
Year Ended 10/31:
2006 358,000 25,000 72,743
2005 358,000 25,000 72,184
2004 358,000 25,000 73,128
2003 358,000 25,000 71,868
2002 358,000 25,000 71,248
MARKET OPPORTUNITY (NMO)
------------------------------------------------------------------
Year Ended 10/31:
2006 380,000 25,000 71,155
2005 380,000 25,000 70,374
2004 380,000 25,000 71,366
2003 380,000 25,000 70,260
2002 380,000 25,000 68,744
DIVIDEND ADVANTAGE (NAD)
------------------------------------------------------------------
Year Ended 10/31:
2006 295,000 25,000 76,722
2005 295,000 25,000 75,838
2004 295,000 25,000 76,977
2003 295,000 25,000 75,446
2002 295,000 25,000 74,665
DIVIDEND ADVANTAGE 2 (NXZ)
------------------------------------------------------------------
Year Ended 10/31:
2006 222,000 25,000 77,949
2005 222,000 25,000 77,124
2004 222,000 25,000 76,526
2003 222,000 25,000 74,899
2002 222,000 25,000 74,089
DIVIDEND ADVANTAGE 3 (NZF)
------------------------------------------------------------------
Year Ended 10/31:
2006 312,000 25,000 75,227
2005 312,000 25,000 74,468
2004 312,000 25,000 74,609
2003 312,000 25,000 72,608
2002 312,000 25,000 72,019
==================================================================
* Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. Total Return on Common Share Net
Asset Value is the combination of changes in Common share net asset value,
reinvested dividend income at net asset value and reinvested capital gains
distributions at net asset value, if any. Total returns are not
annualized.
** After custodian fee credit, expense reimbursement, and legal fee refund,
where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable
to Preferred shares, where applicable.
Spread 92-93
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Board Members
AND OFFICERS
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at nine. None of the board members who are not "interested" persons of the Funds
has ever been a director or employee of, or consultant to, Nuveen or its
affiliates. The names and business addresses of the board members and officers
of the Funds, their principal occupations and other affiliations during the past
five years, the number of portfolios each oversees and other directorships they
hold are set forth below.
NUMBER OF PORTFOLIOS
PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS WITH THE FUNDS OR APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger(1) Chairman of 1994 Chairman (since 1996) and Director of 171
3/28/49 the Board Nuveen Investments, Inc., Nuveen
333 W. Wacker Drive and Board Investments, LLC, Nuveen Advisory Corp.
Chicago, IL 60606 Member and Nuveen Institutional Advisory
Corp.(3); formerly, Director (1996-2006)
of Institutional Capital Corporation;
Chairman and Director (since 1997) of
Nuveen Asset Management; Chairman and
Director of Rittenhouse Asset
Management, Inc. (since 1999); Chairman
of Nuveen Investments Advisers Inc.
(since 2002).
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner Lead Independent 1997 Private Investor and Management 171
8/22/40 Board member Consultant.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown Board member 1993 Retired (since 1989) as Senior Vice 171
7/29/34 President of The Northern Trust Company;
333 W. Wacker Drive Director (since 2002) Community Advisory
Chicago, IL 60606 Board for Highland Park and Highwood,
United Way of the North Shore; Director
(since 2006) of the Michael Rolfe
Pancreatic Cancer Foundation.
------------------------------------------------------------------------------------------------------------------------------------
Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, 171
10/22/48 a private philanthropic corporation
333 W. Wacker Drive (since 1996); Director and Vice
Chicago, IL 60606 Chairman, United Fire Group, a publicly
held company; Adjunct Faculty Member,
University of Iowa; Director, Gazette
Companies; Life Trustee of Coe College
and Iowa College Foundation; formerly,
Director, Alliant Energy; formerly,
Director, Federal Reserve Bank of
Chicago; formerly, President and Chief
Operating Officer, SCI Financial Group,
Inc., a regional financial services
firm.
------------------------------------------------------------------------------------------------------------------------------------
William C. Hunter Board member 2004 Dean, Tippie College of Business, 171
3/6/48 University of Iowa (since June 2006);
333 W. Wacker Drive formerly, Dean and Distinguished
Chicago, IL 60606 Professor of Finance, School of Business
at the University of Connecticut
(2003-2006); previously, Senior Vice
President and Director of Research at
the Federal Reserve Bank of Chicago
(1995-2003); Director (since 1997),
Credit Research Center at Georgetown
University; Director (since 2004) of
Xerox Corporation; Director, SS&C
Technologies, Inc. (May 2005 - October
2005).
------------------------------------------------------------------------------------------------------------------------------------
David J. Kundert Board member 2005 Retired (since 2004) as Chairman, 169
10/28/42 JPMorgan Fleming Asset Management,
333 W. Wacker Drive President and CEO, Banc One Investment
Chicago, IL 60606 Advisors Corporation, and President, One
Group Mutual Funds; prior thereto,
Executive Vice President, Banc One
Corporation and Chairman and CEO, Banc
One Investment Management Group; Board
of Regents, Luther College; member of
the Wisconsin Bar Association; member of
Board of Directors, Friends of Boerner
Botanical Gardens.
94
NUMBER OF PORTFOLIOS
PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS WITH THE FUNDS OR APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED):
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William J. Schneider Board member 1997 Chairman of Miller-Valentine Partners 171
9/24/44 Ltd., a real estate investment company;
333 W. Wacker Drive formerly, Senior Partner and Chief
Chicago, IL 60606 Operating Officer (retired, 2004) of
Miller-Valentine Group; formerly, Vice
President, Miller-Valentine Realty;
Board Member, Chair of the Finance
Committee and member of the Audit
Committee of Premier Health Partners,
the not-for-profit company of Miami
Valley Hospital; Vice President, Dayton
Philharmonic Orchestra Association;
Board Member, Regional Leaders Forum,
which promotes cooperation on economic
development issues; Director, Dayton
Development Coalition; formerly, Member,
Community Advisory Board, National City
Bank, Dayton, Ohio and Business Advisory
Council, Cleveland Federal Reserve Bank.
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Judith M. Stockdale Board member 1997 Executive Director, Gaylord and Dorothy 171
12/29/47 Donnelley Foundation (since 1994); prior
333 W. Wacker Drive thereto, Executive Director, Great Lakes
Chicago, IL 60606 Protection Fund (from 1990 to 1994).
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Eugene S. Sunshine Board member 2005 Senior Vice President for Business and 171
1/22/50 Finance, Northwestern University (since
333 W. Wacker Drive 1997); Director (since 2003), Chicago
Chicago, IL 60606 Board Options Exchange; formerly,
Director (2003-2006), National Mentor
Holdings, a privately-held, national
provider of home and community-based
services; Chairman (since 1997), Board
of Directors, Rubicon, a pure captive
insurance company owned by Northwestern
University; Director (since 1997),
Evanston Chamber of Commerce and
Evanston Inventure, a business
development organization.
NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER
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OFFICERS OF THE FUND:
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Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), 171
9/9/56 Administrative Assistant Secretary and Associate
333 W. Wacker Drive Officer General Counsel, formerly, Vice
Chicago, IL 60606 President and Assistant General Counsel,
of Nuveen Investments, LLC; Managing
Director (2002-2004), General Counsel
(1998-2004) and Assistant Secretary,
formerly, Vice President of Nuveen
Advisory Corp. and Nuveen Institutional
Advisory Corp.(3); Managing Director
(since 2002) and Assistant Secretary and
Associate General Counsel, formerly,
Vice President (since 1997), of Nuveen
Asset Management; Managing Director
(since 2004) and Assistant Secretary
(since 1994) of Nuveen Investments,
Inc.; Assistant Secretary of NWQ
Investment Management Company, LLC.
(since 2002); Vice President and
Assistant Secretary of Nuveen
Investments Advisers Inc. (since 2002);
Managing Director, Associate General
Counsel and Assistant Secretary of
Rittenhouse Asset Management, Inc.;
Assistant Secretary of Symphony Asset
Management LLC (since 2003),
Tradewinds NWQ Global Investors, LLC and
Santa Barbara Asset Management, LLC;
(since 2006); Chartered Financial
Analyst.
95
Board Members
AND OFFICERS (continued)
NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER
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OFFICERS OF THE FUNDS (CONTINUED):
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Julia L. Antonatos Vice President 2004 Managing Director (since 2005), formerly 171
9/22/63 Vice President (since 2002); formerly,
333 W. Wacker Drive Assistant Vice President (since 2000) of
Chicago, IL 60606 Nuveen Investments, LLC; Chartered
Financial Analyst.
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Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, 171
2/3/66 and Assistant Assistant Vice President (since 2000) of
333 W. Wacker Drive Secretary Nuveen Investments, LLC.
Chicago, IL 60606
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Peter H. D'Arrigo Vice President 1999 Vice President and Treasurer of Nuveen 171
11/28/67 Investments, LLC and of Nuveen
333 W. Wacker Drive Investments, Inc. (since 1999); Vice
Chicago, IL 60606 President and Treasurer of Nuveen Asset
Management (since 2002) and of Nuveen
Investments Advisers Inc. (since 2002);
Assistant Treasurer of NWQ Investment
Management Company, LLC. (since 2002);
Vice President and Treasurer of Nuveen
Rittenhouse Asset Management, Inc.
(since 2003); Treasurer of Symphony
Asset Management LLC (since 2003) and
Santa Barbara Asset Management, LLC
(since 2006); Assistant Treasurer,
Tradewinds NWQ Global Investors, LLC
(since 2006); formerly, Vice President
and Treasurer (1999-2004) of Nuveen
Advisory Corp. and Nuveen Institutional
Advisory Corp.(3); Chartered Financial
Analyst.
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John N. Desmond Vice President 2005 Vice President, Director of Investment 171
8/24/61 Operations, Nuveen Investments, LLC
333 W. Wacker Drive (since January 2005); formerly,
Chicago, IL 60606 Director, Business Manager, Deutsche
Asset Management (2003-2004), Director,
Business Development and Transformation,
Deutsche Trust Bank Japan (2002-2003);
previously, Senior Vice President, Head
of Investment Operations and Systems,
Scudder Investments Japan, (2000-2002),
Senior Vice President, Head of Plan
Administration and Participant Services,
Scudder Investments (1995-2002).
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Jessica R. Droeger Vice President 1998 Vice President (since 2002), Assistant 171
9/24/64 and Secretary Secretary and Assistant General Counsel
333 W. Wacker Drive (since 1998) formerly, Assistant Vice
Chicago, IL 60606 President (since 1998) of Nuveen
Investments, LLC; Vice President
(2002-2004) and Assistant Secretary
(1998-2004) formerly, Assistant Vice
President of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.(3);
Vice President and Assistant Secretary
(since 2005) of Nuveen Asset Management.
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Lorna C. Ferguson Vice President 1998 Managing Director (since 2004), 171
10/24/45 formerly, Vice President of Nuveen
333 W. Wacker Drive Investments, LLC, Managing Director
Chicago, IL 60606 (2004) formerly, Vice President
(1998-2004) of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.(3);
Managing Director (since 2005) of Nuveen
Asset Management.
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William M. Fitzgerald Vice President 1995 Managing Director (since 2002), 171
3/2/64 formerly, Vice President of Nuveen
333 W. Wacker Drive Investments; Managing Director
Chicago, IL 60606 (1997-2004) of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.(3);
Managing Director (since 2001) of Nuveen
Asset Management; Vice President (since
2002) of Nuveen Investments Advisers
Inc.; Chartered Financial Analyst.
96
NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) IN FUND COMPLEX
AND ADDRESS WITH THE FUNDS OR APPOINTED(4) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
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Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds 171
5/31/54 and Controller Controller (since 1998) of Nuveen
333 W. Wacker Drive Investments, LLC; formerly, Vice
Chicago, IL 60606 President and Funds Controller
(1998-2004) of Nuveen Investments, Inc.;
Certified Public Accountant.
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Walter M. Kelly Chief 2003 Vice President and Assistant Secretary 171
2/24/70 Officer and (since 2006) formerly, Assistant Vice
333 West Wacker Drive Vice President President and Assistant General Counsel
Chicago, IL 60606 (since 2003) of Nuveen Investments, LLC;
Vice President (since 2006) and
Assistant Secretary (since 2003)
formerly, Assistant Vice President of
Nuveen Asset Management; previously,
Associate (2001-2003) at the law firm of
Vedder, Price, Kaufman & Kammholz.
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David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen 171
3/22/63 Investments, LLC; Certified Public
333 W. Wacker Drive Accountant.
Chicago, IL 60606
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Tina M. Lazar Vice President 2002 Vice President of Nuveen Investments, 171
8/27/61 LLC (since 1999).
333 W. Wacker Drive
Chicago, IL 60606
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Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and 171
7/27/51 and Assistant Assistant General Counsel of Nuveen
333 W. Wacker Drive Secretary Investments, LLC; formerly, Vice
Chicago, IL 60606 President and Assistant Secretary of
Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3); Vice
President (since 2005) and Assistant
Secretary of Nuveen Investments, Inc.;
Vice President (since 2005) and
Assistant Secretary (since 1997) of
Nuveen Asset Management; Vice President
(since 2000), Assistant Secretary and
Assistant General Counsel (since 1998)
of Rittenhouse Asset Management, Inc.;
Vice President and Assistant Secretary
of Nuveen Investments Advisers Inc.
(since 2002); Assistant Secretary of NWQ
Investment Management Company, LLC
(since 2002), Symphony Asset Management
LLC (since 2003) and Tradewinds NWQ
Global Investors, LLC and Santa Barbara
Asset Management, LLC (since 2006).
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, because he is an officer and board member
of the Adviser.
(2) Board members serve an indefinite term until his/her successor is elected.
The year first elected or appointed represents the year in which the board
member was first elected or appointed to any fund in the Nuveen Complex.
(3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were
reorganized into Nuveen Asset Management, effective January 1, 2005.
(4) Officers serve one year terms through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
97
ANNUAL INVESTMENT
MANAGEMENT AGREEMENT
APPROVAL PROCESS
The Board of Trustees is responsible for overseeing the performance of the
investment adviser to the Funds and determining whether to continue the advisory
arrangements. At a meeting held on May 23-25, 2006 (the "MAY MEETING"), the
Board of Trustees of the Funds, including the independent Trustees, unanimously
approved the continuance of the Investment Management Agreement between each
Fund and NAM (the "FUND ADVISER").
THE APPROVAL PROCESS
During the course of the year, the Board received a wide variety of materials
relating to the services provided by the Fund Adviser and the performance of
each Fund. To assist the Board in its evaluation of the advisory contract with
the Fund Adviser at the May Meeting, the independent Trustees received extensive
materials in advance of their meeting which outlined, among other things:
o the nature, extent and quality of services provided by the Fund
Adviser;
o the organization and business operations of the Fund Adviser,
including the responsibilities of various departments and key
personnel;
o the Fund's past performance, the Fund's performance compared to
funds of similar investment objectives compiled by an independent
third party and to customized benchmarks;
o the profitability of the Fund Adviser and certain industry
profitability analyses for unaffiliated advisers;
o the expenses of the Fund Adviser in providing the various services;
o the advisory fees (gross and net management fees) and total expense
ratios of the Fund, including comparisons of such fees and expenses
with those of comparable, unaffiliated funds based on information
and data provided by Lipper (the "PEER UNIVERSE") as well as
compared to a subset of funds within the Peer Universe (the "PEER
GROUP") to the respective Fund (as applicable);
o the advisory fees the Fund Adviser assesses to other types of
investment products or clients;
o the soft dollar practices of the Fund Adviser, if any; and
o from independent legal counsel, a legal memorandum describing, among
other things, the duties of the Trustees under the Investment
Company Act of 1940 (the "1940 ACT") as well as the general
principles of relevant state law in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; an
adviser's fiduciary duty with respect to advisory agreements and
compensation; the standards used by courts in determining whether
investment company boards of directors have fulfilled their duties;
and factors to be considered by the Board in voting on advisory
agreements.
At the May Meeting, the Fund Adviser made a presentation to and responded to
questions from the Board. After the presentations and after reviewing the
written materials, the independent Trustees met privately with their legal
counsel to review the Board's duties in reviewing advisory contracts and
consider the renewal of the advisory contracts. It is with this background that
the Trustees considered the advisory contract with the Fund Adviser. The
independent Trustees, in consultation with independent counsel, reviewed the
factors set out in judicial decisions and SEC directives relating to the renewal
of advisory contracts. As outlined in more detail below, the Trustees considered
all factors they believed relevant with respect to each Fund, including the
following: (a) the nature, extent and quality of the services to be provided by
the Fund Adviser; (b) the investment performance of the Fund and the Fund
Adviser; (c) the costs of the services to be provided and profitability of the
Fund Adviser and its affiliates; (d) the extent to which economies of scale
would be realized as the Fund grows; and (e) whether fee levels reflect these
economies of scale for the benefit of Fund investors.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In reviewing the Fund Adviser, the Trustees considered the nature, extent and
quality of the Fund Adviser's services. The Trustees reviewed materials
outlining, among other things, the Fund Adviser's organization and business; the
types of services that the Fund Adviser or its affiliates provide and are
expected to provide to the Funds; the performance record of the applicable Fund
(as described in further detail below); and any initiatives and enhancements
Nuveen has taken for its municipal fund product line. In connection with their
continued service as Trustees, the Trustees also have a good understanding of
the Fund Adviser's organization, operations and personnel. In this regard, the
Trustees are familiar with and have evaluated the professional experience,
qualifications and credentials of the Fund Adviser's personnel. The Trustees
further reviewed materials describing, among other things, the teams and
98
personnel involved in the investment, research, risk-management and operational
processes involved in managing municipal funds and their respective functions.
Given the Trustees' experience with the Funds and Fund Adviser, the Trustees
recognized the demonstrated history of care and depth of experience of the
respective personnel in managing these Funds. In this regard, the Trustees
considered the continued quality of the Fund Adviser's investment process in
making portfolio management decisions as well as additional refinements and
improvements adopted to the portfolio management processes noted below. With
respect to the services provided to municipal funds, including the Funds, the
Trustees noted that the Fund Adviser continues to make refinements to its
portfolio management process including, among other things, the increased use of
derivatives to enhance management of risk, additional analytical software for
research staff and improved municipal pricing processes.
In addition to advisory services, the independent Trustees considered the
quality of any administrative or non-advisory services provided. The Fund
Adviser provides the Funds with such administrative and other services
(exclusive of, and in addition to, any such services provided by others for the
Funds) and officers and other personnel as are necessary for the operations of
the respective Fund. In connection with the review of the Investment Management
Agreement, the Trustees considered the extent and quality of these other
services which include, among other things, providing: product management (E.G.,
product positioning, performance benchmarking, risk management); fund
administration (E.G., daily net asset value pricing and reconciliation, tax
reporting, fulfilling regulatory filing requirements); oversight of third party
service providers; administration of board relations (E.G., organizing board
meetings and preparing related materials); compliance (E.G., monitoring
compliance with investment policies and guidelines and regulatory requirements);
and legal support (E.G., helping prepare and file registration statements,
amendments thereto, proxy statements and responding to regulatory requests
and/or inquiries). As the Funds operate in a highly regulated industry and given
the importance of compliance, the Trustees considered, in particular, the
additions of experienced personnel to the compliance teams and the enhancements
to technology and related systems to support the compliance activities for the
Funds (including a new reporting system for quarterly portfolio holdings).
In addition to the foregoing, the Trustees also noted the additional services
that the Fund Adviser or its affiliates provide to closed-end funds, including,
in particular, secondary market support activities. The Trustees recognized
Nuveen's continued commitment to supporting the secondary market for the common
shares of its closed-end funds through a variety of initiatives designed to
raise investor and analyst awareness and understanding of closed-end funds.
These efforts include providing advertising and other media relations programs,
continued contact with analysts, maintaining and enhancing its website for
closed-end funds, and targeted advisor communication programs. With respect to
funds that utilize leverage through the issuance of preferred shares, the
Trustees noted Nuveen's continued support for the preferred shares by
maintaining, among other things, an in-house preferred trading desk; designating
a product manager whose responsibilities include creating and disseminating
product information and managing relations in connection with the preferred
share auction; and maintaining systems necessary to test compliance with rating
agency requirements.
Based on their review, the Trustees found that, overall, the nature, extent and
quality of services provided (and expected to be provided) to the respective
Funds under the Investment Management Agreement were of a high level and were
satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUND AND FUND ADVISER
The Board considered the investment performance for each Fund, including the
Fund's historic performance as well as its performance compared to funds with
similar investment objectives identified by an independent third party (the
"PERFORMANCE PEER GROUP") and portfolio level performance against customized
benchmarks, as described below. In evaluating the performance information, in
certain instances, the Trustees noted that the closest Performance Peer Group
for a fund still may not adequately reflect such fund's investment objectives,
strategies and portfolio duration, thereby limiting the usefulness of the
comparisons of such fund's performance with that of the Performance Peer Group.
With respect to state specific municipal funds, the Trustees recognized that
certain state municipal funds do not have a corresponding state specific
Performance Peer Group in which case their performance is measured against a
more general municipal category for various states. The closed-end state
municipal funds that do not have corresponding state-specific Performance Peer
Groups are from Arizona, Connecticut, Georgia, Maryland, Massachusetts,
Missouri, North Carolina, Ohio, Texas, and Virginia. Further, due to a lack of
state-specific unleveraged categories, certain unleveraged state municipal funds
are included in their leveraged state category (such as, the Nuveen California
Select Tax-Free Income Fund, Nuveen California Municipal Value Fund, Nuveen New
York Select Tax-Free Income Fund and Nuveen New York Municipal Value Fund).
In reviewing performance, the Trustees reviewed performance information
including, among other things, total return information compared with the Fund's
Performance Peer Group for the one-, three- and five-year periods (as
applicable) ending December 31, 2005. The Trustees also reviewed the Fund's
portfolio level performance (which does not reflect fund level fees and
expenses) compared to customized portfolio-level benchmarks for the one- and
three-year periods ending December 31, 2005 (as applicable). This analysis is
designed to assess the efficacy of investment decisions against appropriate
measures of risk and total return, within specific market segments. This
information supplements the Fund performance information provided to the Board
at each of their quarterly meetings. Based on their review, the Trustees
determined that the respective Fund's absolute and relative investment
performance over time had been satisfactory.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
In evaluating the management fees and expenses of a Fund, the Board
reviewed, among other things, the Fund's advisory fees (net and gross
management fees) and total expense ratios (before and after expense
reimbursements and/or waivers) in absolute terms as well as comparisons to
the gross management fees (before waivers), net management fees (after
waivers) and total expense ratios (before and after waivers) of comparable
funds in the Peer Universe and the Peer Group. The Trustees reviewed data
regarding the construction of Peer Groups as well as the methods of
measurement for the fee and expense analysis and the performance analysis.
In certain cases, due to the small number of peers in the Peer Universe,
the Peer Universe and Peer Group
99
ANNUAL INVESTMENT MANAGEMENT
AGREEMENT APPROVAL PROCESS (continued)
may be the same. Further, the Trustees recognized that in certain cases
the closest Peer Universe and/or Peer Group did not adequately reflect a
fund's investment objectives and strategies limiting the usefulness of
comparisons. In reviewing comparisons, the Trustees also considered the
size of the Peer Universe and/or Peer Group, the composition of the Peer
Group (including differences in the use of leverage and insurance) as well
as differing levels of fee waivers and/or expense reimbursements. In this
regard, the Trustees considered the fund-level and complex-wide breakpoint
schedules (described in further detail below) and any fee waivers and
reimbursements provided by Nuveen (applicable, in particular, for certain
funds launched since 1999). Based on their review of the fee and expense
information provided, the Trustees determined that each Fund's net total
expense ratio was within an acceptable range compared to peers.
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
The Trustees further reviewed data comparing the advisory fees of the Fund
Adviser with fees the Fund Adviser charges to other clients, including
municipal managed accounts. In general, the fees charged for separate
accounts are somewhat lower than the fees assessed to the Funds. The
Trustees recognized that the differences in fees are attributable to a
variety of factors, including the differences in services provided,
product distribution, portfolio investment policies, investor profiles,
account sizes and regulatory requirements. The Trustees noted, in
particular, that the range of services provided to the Funds is more
extensive than that provided to managed separate accounts. As described in
further detail above, such additional services include, but are not
limited to, providing: product management, fund administration, oversight
of third party service providers, administration of board relations, and
legal support. Funds further operate in a highly regulated industry
requiring extensive compliance functions compared to the other investment
products. In addition to the costs of the additional services,
administrative costs may also be greater for funds as the average account
size for separate accounts is notably larger than the retail accounts of
funds. Given the differences in the product structures, particularly the
extensive services provided to closed-end municipal funds, the Trustees
believe such facts justify the different levels of fees.
3. PROFITABILITY OF FUND ADVISER
In conjunction with its review of fees, the Trustees also considered the
profitability of Nuveen Investments for advisory activities (which
incorporated Nuveen's wholly-owned affiliated sub-advisers). The Trustees
reviewed data comparing Nuveen's profitability with other fund sponsors
prepared by three independent third party service providers as well as
comparisons of the revenues, expenses and profits margins of various
unaffiliated management firms with similar amounts of assets under
management prepared by Nuveen. The Trustees further reviewed the 2005
Annual Report for Nuveen Investments. In considering profitability, the
Trustees recognized the inherent limitations in determining profitability
as well as the difficulties in comparing the profitability of other
unaffiliated advisers. Profitability may be affected by numerous factors,
including the methodology for allocating expenses, the adviser's business
mix, the types of funds managed, the adviser's capital structure and cost
of capital. Further, individual fund or product line profitability of
other sponsors is generally not publicly available. Accordingly, the
profitability information that is publicly available from various
investment advisory or management firms may not be representative of the
industry.
Notwithstanding the foregoing, in reviewing profitability, the Trustees reviewed
Nuveen's methodology and assumptions for allocating expenses across product
lines to determine profitability. In this regard, the methods of allocation used
appeared reasonable. The Trustees also, to the extent available, compared
Nuveen's profitability margins (including pre- and post-marketing profit
margins) with the profitability of various unaffiliated management firms. The
Trustees noted that Nuveen's profitability is enhanced due to its efficient
internal business model. The Trustees also recognized that while a number of
factors affect profitability, Nuveen's profitability may change as fee waivers
and/or expense reimbursement commitments of Nuveen to various funds in the
Nuveen complex expire. To keep apprised of profitability and developments that
may affect profitability, the Trustees have requested profitability analysis be
provided periodically during the year. Based on their review, the Trustees were
satisfied that the Fund Adviser's level of profitability was reasonable in light
of the services provided.
In evaluating the reasonableness of the compensation, the Trustees also
considered any other revenues paid to the Fund Adviser as well as any indirect
benefits (such as soft dollar arrangements, if any) the Fund Adviser and its
affiliates are expected to receive that are directly attributable to their
management of the Funds, if any. See Section E below for additional information.
Based on their review of the overall fee arrangements of the applicable Fund,
the Trustees determined that the advisory fees and expenses of the respective
Fund were reasonable.
100
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
With respect to economies of scale, the Trustees recognized the potential
benefits resulting from the costs of a fund being spread over a larger asset
base as a fund grows. To help ensure the shareholders share in these benefits,
the Trustees have reviewed and considered the breakpoints in the advisory fee
schedules that reduce advisory fees as the applicable Fund's assets grow. In
addition to advisory fee breakpoints as assets in a respective Fund rise, after
lengthy discussions with management, the Board also approved a complex-wide fee
arrangement that was introduced on August 1, 2004. Pursuant to the complex-wide
fee arrangement, the fees of the funds in the Nuveen complex, including the
Funds, are reduced as the assets in the fund complex reach certain levels. In
evaluating the complex-wide fee arrangement, the Trustees considered, among
other things, the historic and expected fee savings to shareholders as assets
grow, the amount of fee reductions at various asset levels, and that the
arrangement would extend to all funds in the Nuveen complex. The Trustees noted
that 2005 was the first full year to reflect the fee reductions from the complex
wide fee arrangement. The Trustees also considered the impact, if any, the
complex-wide fee arrangement may have on the level of services provided. Based
on their review, the Trustees concluded that the breakpoint schedule and
complex-wide fee arrangement currently was acceptable and desirable in providing
benefits from economies of scale to shareholders.
E. INDIRECT BENEFITS
In evaluating fees, the Trustees also considered any indirect benefits or
profits the Fund Adviser or its affiliates may receive as a result of its
relationship with each Fund. In this regard, the Trustees considered revenues
received by affiliates of the Fund Adviser for serving as agent at Nuveen's
preferred trading desk and for serving as a co-manager in the initial public
offering of new closed-end exchange traded funds.
In addition to the above, the Trustees considered whether the Fund Adviser
received any benefits from soft dollar arrangements. With respect to NAM, the
Trustees noted that NAM does not currently have any soft dollar arrangements and
does not pay excess brokerage commissions (or spreads on principal transactions)
in order to receive research services; however, the Fund Adviser may from time
to time receive and have access to research generally provided to institutional
clients.
F. APPROVAL
The Trustees did not identify any single factor discussed previously as
all-important or controlling. The Trustees, including a majority of independent
Trustees, concluded that the terms of the Investment Management Agreements were
fair and reasonable, that the Fund Adviser's fees are reasonable in light of the
services provided to each Fund, and that the renewal of the Investment
Management Agreements should be approved.
101
Reinvest Automatically
EASILY AND CONVENIENTLY
NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR
REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END FUNDS
DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or
capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
the shares may increase before purchases are completed, the average purchase
price per share may exceed the market price at the time of valuation, resulting
in the acquisition of fewer shares than if the dividend or distribution had been
paid in shares issued by the Fund. A pro rata portion of any applicable
brokerage commissions on open market purchases will be paid by Plan
participants. These commissions usually will be lower than those charged on
individual transactions.
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
102
Automatic Dividend
REINVESTMENT PLAN
NOTICE OF AMENDMENT TO THE TERMS AND CONDITIONS
These Funds are amending the terms and conditions of their Automatic Dividend
Reinvestment Plan (the `'Plan") as further described below effective with the
close of business on February 1, 2007. THESE CHANGES ARE INTENDED TO ENABLE PLAN
PARTICIPANTS UNDER CERTAIN CIRCUMSTANCES TO REINVEST FUND DISTRIBUTIONS AT A
LOWER AGGREGATE COST THAN IS POSSIBLE UNDER THE EXISTING PLAN. Shareholders who
do not wish to continue as participants under the amended Plan may withdraw from
the Plan by notifying the Plan Agent prior to the effective date of the
amendments. Participants should refer to their Plan document for notification
instructions, or may simply call Nuveen at (800) 257-8787.
Fund shareholders who elect to participate in the Plan are able to have Fund
distributions consisting of income dividends, realized capital gains and returns
of capital automatically reinvested in additional Fund shares. Under the Plan's
existing terms, the Plan Agent purchases Fund shares in the open market if the
Fund's shares are trading at a discount to their net asset value on the payable
date for the distribution. If the Fund's shares are trading at or above their
net asset value on the payable date for the distribution, the Plan Agent
purchases newly-issued Fund shares directly from the Fund at a price equal to
the greater of the shares' net asset value or 95% of the shares' market value.
Under the Plan's amended terms, if the Plan Agent begins purchasing Fund shares
on the open market while shares are trading below net asset value, but the
Fund's shares subsequently trade at or above their net asset value before the
Plan Agent is able to complete its purchases, the Plan Agent may cease
open-market purchases and may invest the uninvested portion of the distribution
in newly-issued Fund shares at a price equal to the greater of the shares' net
asset value or 95% of the shares' market value. This change will permit Plan
participants under these circumstances to reinvest Fund distributions at a lower
aggregate cost than is possible under the existing Plan.
103
Notes
104
Notes
105
Notes
106
Other Useful
INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
Each Fund's (i) quarterly portfolio of investments, (ii) information regarding
how the Funds voted proxies relating to portfolio securities held during the
12-month period ended June 30, 2006, and (iii) a description of the policies and
procedures that the Funds used to determine how to vote proxies relating to
portfolio securities are available without charge, upon request, by calling
Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at
www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 450 Fifth Street NW, Washington, D.C. 20549.
GLOSSARY OF TERMS USED IN THIS REPORT
AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return that would have been necessary each year to equal the
investment's actual cumulative performance (including change in NAV or market
price and reinvested dividends and capital gains distributions, if any) over the
time period being considered.
AVERAGE EFFECTIVE MATURITY: The average of all the maturities of the bonds in a
Fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
MODIFIED DURATION: Duration is a measure of the expected period over which a
bond's principal and interest will be paid, and consequently is a measure of the
sensitivity of a bond's or bond Fund's value to changes when market interest
rates change. Generally, the longer a bond's or Fund's duration, the more the
price of the bond or Fund will change as interest rates change.
MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's
current annualized dividend divided by its current market price.
NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by
subtracting the liabilities of the Fund (including any MuniPreferred shares
issued in order to leverage the Fund) from its total assets and then dividing
the remainder by the number of shares outstanding. Fund NAVs are calculated at
the end of each business day.
TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to
equal, on an after-tax basis, the yield of a municipal bond investment.
BOARD OF DIRECTORS/TRUSTEES
Robert P. Bremner
Lawrence H. Brown
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Eugene S. Sunshine
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
EACH FUND INTENDS TO REPURCHASE SHARES OF ITS OWN COMMON OR PREFERRED
STOCK IN THE FUTURE AT SUCH TIMES AND IN SUCH AMOUNTS AS IS DEEMED
ADVISABLE. NO SHARES WERE REPURCHASED DURING THE PERIOD COVERED BY THIS
REPORT. ANY FUTURE REPURCHASES WILL BE REPORTED TO SHAREHOLDERS IN THE
NEXT ANNUAL OR SEMIANNUAL REPORT.
107
Nuveen Investments:
SERVING Investors
For GENERATIONS
Photo of: 2 women looking at a photo album.
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS.
Managing more than $154 billion in assets, Nuveen Investments offers access to a
number of different asset classes and investing solutions through a variety of
products. Nuveen Investments markets its capabilities under four distinct
brands: Nuveen, a leader in fixed-income investments; NWQ, a leader in
value-style equities; Rittenhouse, a leader in growth-style equities; and
Symphony, a leading institutional manager of market-neutral alternative
investment portfolios.
FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest.
BE SURE TO OBTAIN A PROSPECTUS, WHERE APPLICABLE. INVESTORS SHOULD CONSIDER THE
INVESTMENT OBJECTIVE AND POLICIES, RISK CONSIDERATIONS, CHARGES AND EXPENSES OF
THE FUND CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER
INFORMATION RELEVANT TO AN INVESTMENT IN THE FUND. FOR A PROSPECTUS, PLEASE
CONTACT YOUR SECURITIES REPRESENTATIVE OR NUVEEN INVESTMENTS, 333 W. WACKER DR.,
CHICAGO, IL 60606. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR
SEND MONEY.
o Share prices
Learn more o Fund details
about Nuveen Funds at o Daily financial news
www.nuveen.com/cef o Investor education
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[LOGO]
NUVEEN
INVESTMEMNTS
EAN-B-1006D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. There were no amendments to or waivers
from the Code during the period covered by this report. The registrant has
posted the code of ethics on its website at www.nuveen.com/etf. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors or Trustees determined that the registrant
has at least one "audit committee financial expert" (as defined in Item 3 of
Form N-CSR) serving on its Audit Committee. The registrant's audit committee
financial expert is Jack B. Evans, Chairman of the Audit Committee, who is
"independent" for purposes of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Dividend Advantage Municipal Fund 3
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP the Audit Committee approved in advance all
audit services and non-audit services that Ernst & Young LLP provided to the
Fund, except for those non-audit services that were subject to the pre-approval
exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The
pre-approval exception for services provided directly to the Fund waives the
pre-approval requirement for services other than audit, review or attest
services if: (A) the aggregate amount of all such services provided constitutes
no more than 5% of the total amount of revenues paid by the Fund to its
accountant during the fiscal year in which the services are provided; (B) the
Fund did not recognize the services as non-audit services at the time of the
engagement; and (C) the services are promptly brought to the Audit Committee's
attention, and the Committee (or its delegate) approves the services before the
audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND (1) BILLED TO FUND (2) BILLED TO FUND (3) BILLED TO FUND (4)
----------------------------------------------------------------------------------------------------------------------
October 31, 2006 $ 29,311 $ 0 $ 400 $ 2,950
----------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
----------------------------------------------------------------------------------------------------------------------
October 31, 2005 $ 27,440 $ 0 $ 1,445 $ 2,750
----------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
----------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services provided
in connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and
related services reasonably related to the performance of the audit or
review of financial statements and are not reported under "Audit Fees".
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance, and tax planning.
(4) "All Other Fees" are the aggregate fees billed for products and services
other than "Audit Fees", "Audit Related Fees", and "Tax Fees".
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM ("Control Affiliate") that
provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for
engagements directly related to the Fund's operations and financial reporting,
during the Fund's last two full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS (1) SERVICE PROVIDERS
-----------------------------------------------------------------------------------------------------
October 31, 2006 $ 0 $ 2,200 $ 0
-----------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
-----------------------------------------------------------------------------------------------------
October 31, 2005 $ 0 $ 2,200 $ 0
-----------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
-----------------------------------------------------------------------------------------------------
(1) The amounts reported for the Fund under the column heading "Tax Fees"
represents amounts billed to the Adviser exclusively for the preparation
for the Fund's tax return, the cost of which is borne by the Adviser. In
the aggregate, for all Nuveen funds for which Ernst & Young LLP serves as
independent registered public accounting firm, these fees amounted to
$275,000 in 2006 and $282,575 in 2005.
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. The Audit
Committee is required to pre-approve non-audit services that Ernst & Young LLP
provides to the Adviser and any Affiliated Fund Services Provider, if the
engagement related directly to the Fund's operations and financial reporting
(except for those subject to the de minimis exception described above). The
Audit Committee requested and received information from Ernst & Young LLP about
any non-audit services that Ernst & Young LLP rendered during the Fund's last
fiscal year to the Adviser and any Affiliated Fund Service Provider. The
Committee considered this information in evaluating Ernst & Young LLP's
independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
-----------------------------------------------------------------------------------------------------------------------
October 31, 2006 $ 3,350 $ 2,200 $ 0 $ 5,550
October 31, 2005 $ 4,195 $ 2,200 $ 0 $ 6,395
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax
Fees" billed to Adviser in their respective amounts from the previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit
Committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the Audit Committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the Audit Committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the Audit Committee at
the next Audit Committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board of Directors or Trustees has a separately designated
Audit Committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The
members of the audit committee are Robert P. Bremner, Lawrence H. Brown, Jack B.
Evans, William J. Schneider and Eugene S. Sunshine.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The registrant invests its assets primarily in municipal bonds and cash
management securities. On rare occasions the registrant may acquire, directly or
through a special purpose vehicle, equity securities of a municipal bond issuer
whose bonds the registrant already owns when such bonds have deteriorated or are
expected shortly to deteriorate significantly in credit quality. The purpose of
acquiring equity securities generally will be to acquire control of the
municipal bond issuer and to seek to prevent the credit deterioration or
facilitate the liquidation or other workout of the distressed issuer's credit
problem. In the course of exercising control of a distressed municipal issuer,
NAM may pursue the registrant's interests in a variety of ways, which may entail
negotiating and executing consents, agreements and other arrangements, and
otherwise influencing the management of the issuer. NAM does not consider such
activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but
nevertheless provides reports to the registrant's Board of Trustees on its
control activities on a quarterly basis.
In the rare event that a municipal issuer were to issue a proxy or that the
registrant were to receive a proxy issued by a cash management security, NAM
would either engage an independent third party to determine how the proxy should
be voted or vote the proxy with the consent, or based on the instructions, of
the registrant's Board of Trustees or its representative. A member of NAM's
legal department would oversee the administration of the voting, and ensure that
records were maintained in accordance with Rule 206(4)-6, reports were filed
with the SEC on Form N-PX, and the results provided to the registrant's Board of
Trustees and made available to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
THE PORTFOLIO MANAGER
The following individual has primary responsibility for the day-to-day
implementation of the registrant's investment strategies:
NAME FUND
Paul Brennan Nuveen Dividend Advantage Municipal Fund 3
Other Accounts Managed. In addition to managing the registrant, the portfolio
manager is also primarily responsible for the day-to-day portfolio management of
the following accounts:
NUMBER OF
PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED ACCOUNTS ASSETS
--------------------------------------------------------------------------------
Paul Brennan Registered Investment Company 14 $11.646 billion
Other Pooled Investment Vehicles 0 $0.00
Other Accounts 1 $.6 million
* Assets are as of October 31, 2006. None of the assets in these accounts are
subject to an advisory fee based on performance.
Compensation. Each portfolio manager's compensation consists of three basic
elements--base salary, cash bonus and long-term incentive compensation. The
compensation strategy is to annually compare overall compensation, including
these three elements, to the market in order to create a compensation structure
that is competitive and consistent with similar financial services companies. As
discussed below, several factors are considered in determining each portfolio
manager's total compensation. In any year these factors may include, among
others, the effectiveness of the investment strategies recommended by the
portfolio manager's investment team, the investment performance of the accounts
managed by the portfolio manager, and the overall performance of Nuveen
Investments, Inc. (the parent company of NAM). Although investment performance
is a factor in determining the portfolio manager's compensation, it is not
necessarily a decisive factor. The portfolio manager's performance is evaluated
in part by comparing manager's performance against a specified investment
benchmark. This fund-specific benchmark is a customized subset (limited to bonds
in each Fund's specific state and with certain maturity parameters) of the
S&P/Investortools Municipal Bond index, an index comprised of bonds held by
managed municipal bond fund customers of Standard & Poor's Securities Pricing,
Inc. that are priced daily and whose fund holdings aggregate at least $2
million. As of October 31, 2006, the S&P/Investortools Municipal Bond index was
comprised of 48,513 securities with an aggregate current market value of $
923,532 billion.
Base salary. Each portfolio manager is paid a base salary that is set at a level
determined by NAM in accordance with its overall compensation strategy discussed
above. NAM is not under any current contractual obligation to increase a
portfolio manager's base salary.
Cash bonus. Each portfolio manager is also eligible to receive an annual cash
bonus. The level of this bonus is based upon evaluations and determinations made
by each portfolio manager's supervisors, along with reviews submitted by his
peers. These reviews and evaluations often take into account a number of
factors, including the effectiveness of the investment strategies recommended to
the NAM's investment team, the performance of the accounts for which he serves
as portfolio manager relative to any benchmarks established for those accounts,
his effectiveness in communicating investment performance to stockholders and
their representatives, and his contribution to the NAM's investment process and
to the execution of investment strategies. The cash bonus component is also
impacted by the overall performance of Nuveen Investments, Inc. in achieving its
business objectives.
Long-term incentive compensation. Each portfolio manager is eligible to receive
bonus compensation in the form of equity-based awards issued in securities
issued by Nuveen Investments, Inc. The amount of such compensation is dependent
upon the same factors articulated for cash bonus awards but also factors in his
long-term potential with the firm.
Material Conflicts of Interest. Each portfolio manager's simultaneous management
of the registrant and the other accounts noted above may present actual or
apparent conflicts of interest with respect to the allocation and aggregation of
securities orders placed on behalf of the Registrant and the other account. NAM,
however, believes that such potential conflicts are mitigated by the fact that
the NAM has adopted several policies that address potential conflicts of
interest, including best execution and trade allocation policies that are
designed to ensure (1) that portfolio management is seeking the best price for
portfolio securities under the circumstances, (2) fair and equitable allocation
of investment opportunities among accounts over time and (3) compliance with
applicable regulatory requirements. All accounts are to be treated in a
non-preferential manner, such that allocations are not based upon account
performance, fee structure or preference of the portfolio manager. In addition,
NAM has adopted a Code of Conduct that sets forth policies regarding conflicts
of interest.
Beneficial Ownership of Securities. As of the October 31, 2006, the portfolio
manager beneficially owned the following dollar range of equity securities
issued by the Registrant and other Nuveen Funds managed by NAM's municipal
investment team.
-----------------------------------------------------------------------------------------------------------------------------
DOLLAR
RANGE OF
DOLLAR EQUITY
RANGE OF SECURITIES
EQUITY BENEFICIALLY
SECURITIES OWNED IN
BENEFICIALLY THE
OWNED IN REMAINDER
FUND OF NUVEEN
FUNDS
MANAGED BY
NAM'S
MUNICIPAL
NAME OF PORTFOLIO INVESTMENT
MANAGER FUND TEAM
-----------------------------------------------------------------------------------------------------------------------------
Paul Brennan Nuveen Dividend Advantage Municipal Fund 3 $0 $10,001 - $50,000
-----------------------------------------------------------------------------------------------------------------------------
PORTFOLIO MANAGER BIO:
Paul Brennan, CFA, CPA, became a portfolio manager of Flagship Financial Inc. in
1994, and subsequently became an Assistant Vice President of NAM upon the
acquisition of Flagship Resources Inc. by Nuveen in 1997. He became Vice
President of NAM in 2002. He currently manages investments for 15
Nuveen-sponsored investment companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrants Board implemented after the registrant
last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Dividend Advantage Municipal Fund 3
-----------------------------------------------------------
By (Signature and Title)* /s/ Jessica R. Droeger
----------------------------------------------
Jessica R. Droeger
Vice President and Secretary
Date: January 5, 2007
-------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Gifford R. Zimmerman
----------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)
Date: January 5, 2007
-------------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: January 5, 2007
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.